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Endowment Effect
Definition
The Endowment Effect refers to the tendency for people to value and value more things or services that they feel they own. In other words, ownership affects the subjective value of things or services.
Explanation
The Endowment Effect is a phenomenon that is mainly studied in consumer psychology and behavioral economics. This phenomenon has the following characteristics:
Endowment effect: When people own an item or service, they tend to value it more. This causes them to ask for a higher price when selling the item or to evaluate the product more positively.
Economic Decision Making: The Endowment Effect also affects economic decisions. For example, when selling a stock you own, you tend to value the stock more highly and set a higher selling price.
Marketing Strategy: Businesses can leverage the Endowment Effect by using strategies that give consumers a sense of ownership, such as encouraging them to purchase a product after a free trial period or giving them a sense of ownership through membership.
The Endowment Effect is one of the important psychological phenomena that can increase brand loyalty and customer satisfaction by making users value goods or services more.
Importance
The Endowment Effect plays an important role in user experience design. The more a user feels ownership of a product or service, the more likely they are to be satisfied and loyal to it. Therefore, if a company applies strategies that can make users feel ownership, it can increase positive perceptions of the product or service.
