Endowment Effect and Wrenching Toughness

In behavioral economics, the ‘endowment effect’ states that individuals ascribe higher value to the objects they possess than to the objects they could secure. If this is true, then we are ‘loss averse’ creatures that prefer to keep what we have and are more disheartened by the loss of our possessions than by the gain of some other, perhaps more valuable item.

In the eyes of the philosopher, the assumption underlying the endowment effect is that fear of loss trumps the pursuit of the Good. This, as I argued in my last post, is why we need to have contests in which

  • our fears of losing what we value highly (or, depending on the stakes, most highly) is pitted against a defensible conception of the Good, i.e., what we reasonably take to be most worth securing, defending, honoring, realizing, or upholding.

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