Loading
🎁
Endowment Effect
You need to be a BFM+ member to save things to your library
People overvalue things that they own.
👀
Introduction
People will overvalue something that they own (or perceive to own, even if it's just having access to a product), regardless of market value.
i.e., once they've test driven the car, and synced their phone to the bluetooth, they'll want it more.
🧵
Deeper dive
There are plenty of studies affirming the irrationality of ownership, but my favourite are those on Capuchin monkeys—which shows how broad the research is on this.
Through a series of experiments with bartering, it was demonstrated that Monkeys and Chimpanzees will value identical tokens differently, depending on which they own.
🔥
Potential impacts
Churn
- If people feel like they own something, or have invested into personalising an experience, they're typically less likely to churn.
- On the other hand, if the process of personalising (i.e., creating) an account is too time consuming, they may churn sooner.
BFM+
Unlock this instantly with BFM+
- Access the entire library
- Track your progress through collections
- Receive premium weekly newsletters
- Build a library of ideas
Team plan perks include:
- Share links with your entire team. No paywalls or logins.
- Get discounts for upskilling your entire product team
Written by Peter Ramsey
Published
Last edited
Related Bites
Photograph your bookshelf
Instead of manually adding books one by one, Tome gives you the option to take a photo of your bookshelf during onboarding so it can recommend communities based on your reading list.
Look, it's us!
If you’re on a Duolingo family plan, you’ll see all of your avatars together in a banner.
