Endowment effect and status quo bias

type: effect · origin: study · evidence: strong · themes: choices and costs

Claim assessed: Something seems more valuable to us once it becomes ours.

Published 5 October 2026 · how we work

In short

The endowment effect means we ask more to give something up than we would pay to get it. Status quo bias means we choose the option already in place more often, just because it is the existing one. The two are related: in both cases, what we have now becomes the reference point, and giving it up weighs more than the equivalent gain. Both effects show up consistently. The dispute is about what produces them and how much they depend on the way they are measured.

What it says

The mugs. Kahneman, Knetsch and Thaler (1990) gave half the students in a class a coffee mug with the university logo, which cost $6 at the bookstore. They then ran a real market: those with a mug could sell, the others could buy. If owning the mug didn’t change what it was worth, about half the mugs should have changed hands. Far fewer did, and the median price asked by sellers was more than twice the price offered by buyers. With tokens worth only a fixed sum of money, the same rules produced exactly the expected number of trades. That rules out the explanation that participants didn’t understand the rules. After four repeated rounds, the gap had not narrowed.

Sellers, buyers and choosers. In another experiment, with 77 students, a third group got nothing but could choose, at each price, between the mug and money. Their situation was identical to the sellers’: they could leave with either the mug or the money. Yet the choosers valued the mug almost like the buyers, not like the sellers. The authors’ conclusion: the effect comes mostly from reluctance to give up something you have, not from reluctance to pay.

Mug or chocolate. In the same paper, the authors describe an experiment by Knetsch with three classes. Some students were given a mug, others a chocolate bar, and others could choose directly. When given the mug, 89% kept it. When they could choose from the start, 56% chose the mug. When given the chocolate, only 10% traded it for the mug. The objects weren’t prizes, everyone in the class got one, so the effect appears almost instantly.

Status quo. Samuelson and Zeckhauser (1988) gave participants hypothetical decisions, for example how to split a budget or how to invest their money. The same option was chosen more often when it was presented as the existing one than when it was just one of the options. They found the same pattern in real decisions: Harvard employees stayed with the insurance plan they had first chosen, although a more attractive one had appeared. Xiao et al. (2021) repeated four of the scenarios, with the hypotheses registered in advance, in two studies with over 300 participants each. The effect appeared clearly in three scenarios, but not in the one about choosing a car’s colour.

Default options. When an option is preselected, it becomes the status quo. Jachimowicz et al. (2019) describe the best-known example, from Johnson and Goldstein (2003): in countries where everyone is an organ donor unless they explicitly refuse, consent is above 90%. In countries where you have to sign up, it is much lower. Their meta-analysis pools 58 studies with 73,675 participants and finds a large effect of the default, d = 0.68. The effect varies a lot, though: some studies found nothing, and two found the reverse effect.

In the general population. Chapman et al. (2023) measured the effect with lottery tickets, in four paid surveys of representative samples of American adults, with 4,000 participants in total. On average, people asked 90% of the ticket’s expected value to sell it but offered only 68% to buy it. At the individual level, 58% showed the effect, 12% gave the same value, and 30% showed the reverse effect.

Example

Someone has paid for the same phone plan for years, although other offers are cheaper for what they use. If they were choosing from scratch today, they probably wouldn’t pick their current plan. Being the plan they already have gives it an advantage it doesn’t deserve. The example is an illustration, not a study cited here.

How to apply it

The steps below are a practical way of applying it that we propose, based on the studies cited.

1. Ask whether you would buy it today. “If I didn’t have this, would I pay this price for it?” In the mug experiment, those choosing between the mug and money valued it like the buyers, not like the sellers.
2. Put the options on an equal footing. Write them down as if none of them were the current one. In the status quo studies, the same option was chosen less often when it wasn’t presented as the existing one.
3. When you set the default for others, choose it carefully. It will be chosen much more often than the others, so it should be the one you would recommend.
4. When you get a preselected option, ask why it is there. Jachimowicz et al. show that the effect is larger when people see the default as a recommendation or as the existing option. Sometimes it really is a good recommendation, sometimes it is just inertia.

Limits and nuances

• The procedure matters, and the dispute isn’t settled. Plott and Zeiler (2005) trained participants extensively on how the buying and selling mechanism works and ensured anonymity. Under these conditions, they found no difference between the price asked and the price offered for mugs. Fehr, Hakimov and Kübler (2015) repeated their procedure and found the gap again, including among participants who made no obviously wrong choices in the training exercises.
• The loss aversion explanation is in doubt. In Chapman et al., the effect was not related to how much people avoided losses in gambles. The authors conclude that the effect exists but probably has other causes than those usually assumed. The study is an NBER working paper that has not yet gone through a journal’s review.
• Not for everyone and not for everything. In the representative sample, almost a third showed the reverse effect. Kahneman, Knetsch and Thaler note that the effect isn’t to be expected for things held for resale, and that it should be strongest for things in use that are hard to replace.
• Defaults don’t work equally everywhere. In Jachimowicz et al.’s meta-analysis, they were more effective in consumer decisions and less effective in environmental ones.
• Many studies use hypothetical decisions or students. The mug experiments were run with students, and the status quo scenarios are hypothetical. The exceptions are Chapman et al.’s survey, the organ donation data and the real-world data analysed by Samuelson and Zeckhauser.
• What we read. Kahneman, Knetsch and Thaler (1990), from the copy on the MIT site, Jachimowicz et al. (2019), Xiao et al. (2021) and Chapman et al. (2023) we read in full. For Kahneman, Knetsch and Thaler (1991), Plott and Zeiler (2005) and Fehr et al. (2015) we read the abstract. We describe Samuelson and Zeckhauser (1988) and Johnson and Goldstein (2003) from Xiao et al. and Jachimowicz et al.; for Johnson and Goldstein we also read the short abstract.

Sources

• William Samuelson, Richard Zeckhauser (1988). Status quo bias in decision making
• Daniel Kahneman, Jack L. Knetsch, Richard H. Thaler (1990). Experimental tests of the endowment effect and the Coase theorem
• Daniel Kahneman, Jack L. Knetsch, Richard H. Thaler (1991). Anomalies: The endowment effect, loss aversion, and status quo bias
• Eric J. Johnson, Daniel G. Goldstein (2003). Do defaults save lives?
• Charles R. Plott, Kathryn Zeiler (2005). The willingness to pay–willingness to accept gap, the 'endowment effect,' subject misconceptions, and experimental procedures for eliciting valuations
• Dietmar Fehr, Rustamdjan Hakimov, Dorothea Kübler (2015). The willingness to pay–willingness to accept gap: A failed replication of Plott and Zeiler
• Jon M. Jachimowicz, Shannon Duncan, Elke U. Weber, Eric J. Johnson (2019). When and why defaults influence decisions: A meta-analysis of default effects
• Qinyu Xiao, Choi Shan Lam, Muhrajan Piara, Gilad Feldman (2021). Revisiting status quo bias: Replication of Samuelson and Zeckhauser (1988)
• Jonathan Chapman, Mark Dean, Pietro Ortoleva, Erik Snowberg, Colin Camerer (2023). Willingness to accept, willingness to pay, and loss aversion

See also: Cost of action vs cost of inaction, Default effect, Framing effect, Illusion of control, Loss aversion, Negativity bias, Sunk cost