A psychological tendency to value things you own more than their market value. This creates resistance to letting go and can hinder rational buying and selling decisions.
How the Endowment Effect Influences Pricing on Flea Market Apps
The endowment effect directly impacts listing prices on Mercari and other flea market apps. Because you have an emotional attachment to items you've used, you tend to set prices higher than the market rate. Subjective assessments like "it's still in good condition" or "I barely used it" exceed the objective secondhand market value.
As a result, items priced above market value don't attract buyers and remain unsold indefinitely. Many products on Mercari that receive "likes" but no purchases are caused by pricing gaps due to the endowment effect. Searching for sold prices of the same product before listing to objectively understand the market rate is the first step to successful selling.
Understanding the Endowment Effect for Smarter Buying and Selling
The endowment effect also applies to points and coupons. When PayPay bonuses or Rakuten Points accumulate, they start to feel like "your own money," making it feel wasteful to spend them. However, points have expiration dates, and once expired, their value is zero. By reframing points not as "assets you already own" but as "discount vouchers with an expiration date," you can use them more rationally.
Free trials also cleverly exploit the endowment effect. When you heavily use a service during the free trial period of Notta or Amazon Prime, the endowment effect of "I can't give this up anymore" kicks in, increasing the conversion rate to paid plans. By setting criteria for "do I really need this" before starting the trial, you can make decisions without being swayed by the endowment effect.
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