The Endowment Effect, HODLing and the Impossible Self-Appraisal

The Endowment Effect, HODLing and the Impossible Self-Appraisal


If it feels like these are backwards, unintuitive habits, well, I’m sorry but it gets worse.  There’s signs of correlation between Endowment Effect judgements and the Dunning-Kruger Effect.  That is the cognitive bias in which the less expertise a person has in a subject, the more they overestimate their skills with it.  It’s the inevitable end point of “how hard could it really be?”  The more inexperienced an amateur is at a new task or craft, the greater the risk of them grossly overvaluing their output.  For example, a person with, say, no experience building things with their hands might think that assembling a snap-together plastic storage shed is a momentous triumph worth sharing with the world.

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