The endowment effect

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2024

This is the tendency to value or prioritize the things that we already have or own, over the things that we don't have or don't own. For example, if we have a current employee who is interested in a new position in the organization, we may be more likely to value or prioritize their application over the applications of external candidates, even if the external candidates are more qualified or suitable for the position. The endowment effect can cause us to make biased or self-centered hiring decisions, and it can lead us to overlook the value of diversity, innovation, or competition in the hiring process.

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