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The Endowment Effect and Thanksgiving

From the Blog of Phyllis G. Pollack.

       I am reading an interesting book, The Science of Settlement by Barry Goldman, MA, JD (ALIABA 2008). In it he discusses how to prepare for and effectively bargain during a negotiation. Towards this end,  Mr. Goldman discusses a lot of different psychological and/or economic principles. One is the “endowment effect” (which I have discussed previously) which means that ‘human beings tend to overvalue anything perceived as “mine.” “ (Id. at 21.) He then quotes from O.W. Holmes:
     

      “It is in the nature of a man’s mind. A thing which you enjoyed and used as your own for a long time, whether property or opinion, takes root in your being and cannot be torn away without your resenting the act and thing to defend yourself, however you came by it.” (Id.)

       In short, people value what belongs to them. (Id. at 21.) This principle seems appropriate this week. It seems to fit in with Thanksgiving: we should value and give thanks for what we have, especially in these trying times. Whatever it is that we do have, no matter how little or how much it may be – value it and give thanks for it.

                        author

Phyllis Pollack

Phyllis Pollack with PGP Mediation uses a facilitative, interest-based approach. Her preferred mediation style is facilitative in the belief that the best and most durable resolutions are those achieved by the parties themselves. The parties generally know the business issues and priorities, personalities and obstacles to a successful resolution as… MORE >

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