Adonis Diaries

Archive for October 26th, 2014

This Endowment effect

Why do we consider what we own to be more valuable as soon as we get possession of?

Though we bargained hard considering the “property” as far less valuable than what it is?

Why do you tend to cling to things that can be sold at good prices, and end up cramming every empty space in your house and feeling terrible that you have no more space for new acquisitions?

We are better at collecting properties than at casting them off

And we want to charge more than we are willing to spend on acquired objects.

It looks like Emotional attachment systematically adds a few zeros to your selling price.

For example, if group A of people are given mugs to take home or to sell, and another group B who are Not given mugs are asked to buy mugs from group A.

We could assume that 50% of group and 50% of group B would be willing to trade.

It turned out that far less than 50% in both groups were willing to trade. Why?

People in group A hiked the market price and people in group B wanted to buy below the market price.

Associated with Endowment tendencies is Winner’s Curse in auctions.

You keep bidding higher than the market value simply because you feel that you are participating in the ownership, even if you don’t get the property.

Warren Buffet warned “Just never go to auctions. Period” Why?

Most often, the winner in the bidding contest game ends up going bankrupt pretty soon.

For example, if you were unlucky and were allowed to go through all the stages of a selection process, the hurt in the final rejection is much bigger than if you were rejected outright in the initial phases.

Endowment is a broader term for inheriting properties. Most the 10% richest people earned their wealth from inheritance and they control 80% of the world wealth

Read: “The Art of Thinking Clear”


Palestinian-American killed by Israeli military in West Bank protest

Does Israel need to cut the throat of a US citizen in order for the US administration to add another terrorist State to its list of targets?

Last week, protests erupted when Muslims were prevented access to East Jerusalem’s Al-Aqsa Mosque while Israelis were allowed to enter.

The Israeli Parliament is about to decree that Israeli Jews should have the right to pray in Al Aqsa, kind of sharing this religious site.

The West Bank is in effervescence since then.

Orwah Hammad, 14, is the latest casualty in ongoing tensions in Jerusalem and the West Bank

A Palestinian-American teenager was shot and killed Friday by the Israeli military, and 12 Palestinians were wounded during protests, amid heightened tensions in Jerusalem and the West Bank.

Orwah Hammad, 14, shot in the northern West Bank village of Silwad, is the second Palestinian teen to be killed by the Israeli military in eight days.

Bahaa Samir Badr, 13, was killed last week in the village of Beit Laqia.

5-year-old Palestinian girl was also hit and killed by a car driven by an Israeli settler in the West Bank on Oct. 19.

The Israeli military, responding to Hammand’s death, said soldiers “prevented an attack” by opening fire on a Palestinian who was throwing fire-bombs at traffic on a highway.

A relative identified Hammad as a U.S. national who was born in New Orleans, the Associated Press reported.

Israelis  kidnapping and burning alive a Palestinian teenager in east Jerusalem (pouring gasoline in his mouth), sparking riots.

The kidnappings set off a series of events that led to the 50-day Gaza war, which left more than 2,100 Palestinians and 71 Israelis, mostly sodiers, dead.

Thomas Coex / Getty Images

Al Jazeera and wire services

Why Jerusalem tensions have reached a boiling point” class=””>Why Jerusalem tensions have reached a boiling point

Last week, protests erupted when Muslims were prevented access to East Jerusalem’s Al-Aqsa Mosque while Israelis were allowed to enter.

On Wednesday, a 21-year-old Palestinian from the village of Silwan crashed his car into a crowd of people at a light-rail stop killing a 3-month-old Israeli. The driver was shot and killed by Israeli forces.





Blog Stats

  • 1,516,179 hits

Enter your email address to subscribe to this blog and receive notifications of new posts by

Join 822 other subscribers
%d bloggers like this: