Editing Endowment effect (section)

==Implications==
Implications regarding the endowment effect are present at both the individual and corporate level. Its presence can cause market inefficiencies and value irregularities between buyers and sellers with similar consequences at smaller or upscaled transactions.<ref>{{Cite journal |last1=Brackett |first1=Marc A |last2=Mayer |first2=John D |last3=Warner |first3=Rebecca M |date=April 2004 |title=Emotional intelligence and its relation to everyday behaviour |journal=Personality and Individual Differences |volume=36 |issue=6 |pages=1387–1402 |doi=10.1016/s0191-8869(03)00236-8 |issn=0191-8869}}</ref>

=== Individual ===
[[Herbert Hovenkamp]] (1991)<ref name="Hovenkamp" /> has argued that the presence of an endowment effect has significant implications for [[law]] and [[economics]], particularly in regard to [[welfare economics]]. He argues that the presence of an endowment effect indicates that a person has no [[indifference curve]] (see however Hanemann, 1991<ref name="Hanemann" />) rendering the neoclassical tools of welfare analysis useless, concluding that courts should instead use WTA as a measure of value. Fischel (1995)<ref name="Fischel" /> however, raises the counterpoint that using WTA as a measure of value would deter the development of a nation's infrastructure and [[economic growth]]. The endowment effect changes the shape of the indifference curves substantially<ref>{{Citation|url=http://docplayer.net/46319513-Behavioural-indifference-curves.html |title="Behavioral Indifference Curves," Australasian Journal of Economics Education. 2015, 2: 1–11}}</ref> Similarly, another study that is focused on the Strategic Reallocations for Endowment analyses how it is the case that economics's agents welfare could potentially increase if they change their endowment holding.

Further to this, the endowment effect has been linked to both economic and psychological impacts of various scale. For example, often individuals refuse the sale of their house or upscale their expected value simply due to their emotional attachment and effort poured into it. This means they might either stick with a property which causes greater inconvenience to alternatives or have an increased level of difficulties associated with its sale.<ref name="Huck" /> Either of these scenarios both negatively impact the relevant economy and the individual's mental welfare. Alternatively, if a buyer is subject to purchasing the item at the WTA level when it is set above market price, they are subject to overspending which positively impacts the economy whilst potentially reducing individual welfare yet again.

=== Business ===
In recent years the endowment effect has largely been leveraged within e-commerce. Businesses have expanded more rapidly than previous years through its effective integration into marketing products and services.<ref>{{Cite web |last1=Model |first1=Slide |last2=admin |date=2020-06-30 |title=How the Endowment Effect can Affect Businesses |url=https://slidemodel.com/endowment-effect-and-businesses/ |access-date=2023-04-24 |website=SlideModel |language=en-US}}</ref> Here consumers are often given a sense of ownership over what the business possesses thereby unlocking the cognitive bias.

==== Free trials ====
By offering free trials to select services, business not only expand the number of users reached, but during this trial period they also give consumers a sense of ownership.<ref name=":2">{{Cite web |title=Endowment Effect |url=https://corporatefinanceinstitute.com/resources/wealth-management/endowment-effect/ |access-date=2023-04-24 |website=Corporate Finance Institute |language=en-US}}</ref> Consumer's psychological perception thus makes them more reluctant to part with the service when the trial ends, thereby increasing the quantity of subscribers.

==== Free return ====
This marketing strategy makes consumers more likely to purchase the product due to the perception of it being more endowing. However, once purchased, customers are less inclined to return it even if a level of dissatisfaction was experienced.<ref name=":2" />

==== Haptic imagery ====
Various businesses offer a sense of ownership through showing customers what their product might look like in a relatable environment.<ref name=":3">{{Cite journal |last1=Peck |first1=Joann |last2=Barger |first2=Victor A. |last3=Webb |first3=Andrea |date=2013-04-01 |title=In search of a surrogate for touch: The effect of haptic imagery on perceived ownership |url=https://www.sciencedirect.com/science/article/pii/S1057740812001192 |journal=Journal of Consumer Psychology |language=en |volume=23 |issue=2 |pages=189–196 |doi=10.1016/j.jcps.2012.09.001 |issn=1057-7408|url-access=subscription }}</ref> Fashion and furniture businesses largely rely on haptic imagery to sell their products. While they do not necessarily offer customers to use their products they create an image of what could be, by either offering online viewing adjustments or appealing to ones sense of imagination.<ref name=":3" /> This feeling of ownership makes it harder for consumers to let go of the image and thus the product.