Endowment effect

People value things more once they feel they own them.

Loss and scarcity Mainly on Product pages
Where it applies

Three of the eight page areas.

HomepageNot typical CategoryNot typical SearchNot typical ProductMainly here CartAlso applies CheckoutNot typical Post-purchaseAlso applies

Not usually a sitewide principle. See everything at work on Product pages

How to use it

Five ways to use it, and one to avoid.

  • Offer personalisation and customisation previews.
  • Use “your basket” language.
  • Offer saved items and wishlists.
  • Offer try-before-you-buy, free trials and AR try-on.
  • Use imagery that invites the shopper to picture handling or using the product.
  • Avoid: free trials that roll into paid subscriptions without clear upfront terms and easy cancellation.
What the research found

A confirmed gap, but smaller for ordinary goods. Pre-purchase ownership was tested in labs only.

Felt ownership before purchase raised valuations in lab studies only.

Owners demand more to give up an item than buyers will pay. A meta-analysis confirms the gap but finds it smaller for ordinary goods and shrinking with market experience, and Plott and Zeiler (2005) removed it with stricter procedures. Felt ownership before purchase (touch, imagery, touchscreens) raised valuations in lab studies only.

Key research

Five sources, each checked.

Last reviewed

Kahneman, Knetsch & Thaler (1990) Experimental Tests of the Endowment Effect and the Coase Theorem J. Political Economy Read the source Tunçel & Hammitt (2014)Meta-analysis A new meta-analysis on the WTP/WTA disparity J. Environmental Economics and Management Read the source Peck & Shu (2009) The Effect of Mere Touch on Perceived Ownership J. Consumer Research Read the source Thaler (1980) Toward a positive theory of consumer choice J. Economic Behavior & Organization Read the source Plott & Zeiler (2005) The Willingness to Pay-Willingness to Accept Gap, the "Endowment Effect," Subject Misconceptions, and Experimental Procedures for Eliciting Valuations American Economic Review Read the source
Before you use it · UK law

Free trials that roll into paid subscriptions need clear upfront terms and easy cancellation; the DMCC Act 2024 subscription rules are due in force in January 2027. Online buyers already have a 14-day right to cancel under the Consumer Contracts Regulations 2013.

This is simply a pointer to check, not legal advice. Seek legal advice before you put this principle into action.