Just let it go already…

The endowment effect, and why you can’t get rid of that moldy Beanie Baby

Growing up, I had a stuffed animal that I loved. My mom tells me that the mother of one of my dad’s colleagues gifted him to me when I was still in utero. And he was never far from Baby Me.

I still have that stuffed animal.

It used to be a rabbit. It’s now an unrecognizable, amorphous blob of matted bluish-grey cloth that lives in a cabinet in the house I grew up in.

And I love it.

Despite the fact that the rabbit is ugly, stained, and probably a health hazard, the thought of losing it feels like losing something of infinite value.

Irrational?

Definitely. I’m a deeply sentimental person.

And also, it’s emblematic of something called the endowment effect — the cognitive bias where simply owning something makes it feel significantly more valuable.

Ownership trumps logic

Back in 1990, Daniel Kahneman (Nobel laureate and doyen of behavioral economics), Jack Knetsch, and Richard Thaler set up a bunch of different experiments which all involved giving Ivy League college students coffee mugs and then asking them to sell them. 

Because, you know, Ivy League students represent all of us. 

Anyway, in one of the experiments, they handed out these mugs—ordinary, standard-issue college mugs each of which was valued at $6 in the university bookstore—to half the participants. 

Then, they asked those students how much they’d sell their mug for, and asked the other half, who didn’t get mugs, how much they’d pay to buy one.

On average, the buyers were willing to pay around $3 for a previously-owned mug. 

The sellers? They wanted to sell their mugs for $7—more than what the buyers would have had to pay had they just walked down to the bookstore. 

Same (new, not even used) mug. Wildly different values.

This experiment, as well as the dozen others in their paper, suggest that simply possessing the mug made students value it more. They became attached to the mug, and that attachment translated into a more-than-double difference in perceived value. 

The owners thought that their mug was so special that it was worth even more than the exact same mug’s retail value.

In other words, we like our things just because they’re ours. 

Photo by Gabriel Lenca on Unsplash

Your hoarder brain

The endowment effect taps directly into a deep, primal anxiety about loss. We hate losing even more than we love gaining. 

We’ve talked about loss aversion before. There, we addressed loss aversion in the setting of big things like grief. Our aversion to loss doesn’t just impact the things we value most. We fear losing anything we have, valuable or not, simply because we own it.

This cognitive hoarding is everywhere. It’s (one reason) why it feels like everything on Facebook marketplace is so routinely overvalued. It’s why investors hold onto stocks for longer than they should, especially if they chose those stocks themselves. It’s why free trial memberships work so well—you don’t want to cancel the gym membership because you might “start going again.” 

It’s also why Manhattan Mini-Storage is such a successful business. People will pay hundreds of dollars a month to store items worth less than that, unable to part with things they haven’t touched in years simply because they own them. It’s why I have a blue shirt in my closet that’s so horrifically out of fashion that it’s never coming back in style.

And it’s why we rarely switch jobs, let alone careers—even if those switches would give us higher salaries and a better work-life balance—because we overvalue the current perks (parking spot, familiar desk, company laptop) that we’d lose.

We own these things. And our brains, panicked at potential loss, inflate their value far beyond reality.

When you’re stuck in your own mess

Identity supercharges this bias. As much as I love that ratty stuffed animal, nothing about it affects my identity. I’d be sad if it disappeared, but nothing about who I am would change. Same, probably, if you lost your favorite T-shirt, book, or melted plastic pourover funnel.

But, that project at work you’ve poured months into, at the cost of your own peace of mind, the novel you’ve been drafting endlessly, the startup that’s now your identity, even if it’s dragging you into exhaustion and burnout?

If you’re not careful, those can become particularly susceptible to the endowment effect. Walking away from those feels particularly impossible, not just because you’ve invested a ton of effort into them, but because they’re yours. And they’re your identity.

The anxiety here isn’t just about losing the item or the project. It’s about losing a piece of yourself.

Identity can be a formidable amplifier of the endowment effect. When something becomes part of our self-concept, its value skyrockets—regardless of objective reality. 

I’ve lost count of the number of doctors who keep clinging to clinical practice despite the fact that it’s literally caused their divorces, because “being a doctor” is who they are. They don’t even like seeing patients any more, some of them. But they still do, simply because that’s theirs—their career path, their lifestyle, their identity.

We fear letting go of what we’ve integrated into ourselves because we fear losing ourselves entirely. It’s a deeply emotional, and deeply human, reaction. It’s anxiety disguised as loyalty. Our brains double down on attachment precisely when logic suggests we should walk away.

You don’t own your misery

In my experience, fewer than 6% of all health professionals ever successfully get themselves out of burnout (I desperately want to run an actual study on this…someone fund me?). 

And after nearly a year of writing about the cognitive biases that keep us stuck, that bias us to the status quo, that are immune to the plaints of burnout, that no longer surprises me.

Our brains default to protection. And this is why getting an external mentor is probably the key thing that unites the people that succeed in moving out. 

Getting unstuck requires someone to untangle cognitive distortions, not with platitudes, but with rigorous, evidence-based decision-making frameworks.

It takes dissecting what you truly value versus what you’ve convinced yourself you value simply because you “own” it. It takes confronting identity anxiety, stripping away the totally human (and totally irrational) attachments to reveal the actual worth of your choices, your commitments, and your possessions.

And then creating a series of actionable, bite-sized steps to walk you out of burnout and into a life you love again.

There’s nothing inherently special about my stuffed animal. Nothing inherently special about the mugs in Kahneman, Knetsch, and Thaler’s studies. And—I hate to be the one to tell you this—nothing inherently special about the job, the broken relationship, or the professional identity you’re wearing (and that’s wearing you thin).

Ownership isn’t destiny. If the endowment effect has tricked you into holding onto things that drain you, then clarity, guidance, and a structured path forward become invaluable.

Your life’s worth infinitely more than a mug. 

It’s time to stop sacrificing your future joy on the altar of today’s attachments. 

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