Endowment Effect

The endowment effect talks about a circumstance during which an individual values something they already own more than something which they don’t yet own. Sometimes termed as divestiture aversion, the perceived greater value occurs merely since the individual possesses the thing in question. Investors are likely to stick with certain assets because of familiarity & comfort, even if there’re inappropriate or come to be unprofitable. The endowment effect is an illustration of this an emotional prejudice.