What's it worth? There's nothing a psychologist likes better than to wind up an economist, and in the 70s psychology succeeded big time with the endowment effect. Economics expects us to give an object a value, and that value should determine how we would price it to buy it or sell it. But experiments have shown that we value something we own a lot more than the same object if we don't own it. Economists, and us sciencey types who want people to be more rational, tend to highlight the endowment effect as one of the 'errors' people suffer from in making rational decisions. But I'd suggest, as is often the case in science, it's more complicated than that. Here are two suggestions as to why the endowment effect can be just as rational as an other approach. I'm going to take a variant of the original experimental demonstration of the endowment effect to show this. In our experiment, some participants are given a mug, then later asked how much they...