The endowment effect revisited: Is decision-making more smart than biased?

For more than 3 decades, the endowment effect has been regarded as one of the most influential concepts of behavioral economics. Its core premise is that people tend to value something more highly once they own it. Traditional research has treated this as evidence of irrational decision-making. The argument from this camp is that ownership creates a psychological bias that discourages trade and reduces economic efficiency.

Research conducted by Altman (2026) challenges that long-standing view. Rather than seeing the endowment effect as a flaw in human thinking, it purports that ownership often changes an item's real value to its owner...