To counteract [[Endowment effect]], whenever you possess X that you're not sure is worth is weight, think about it. Examples:
- If I didn't have this recurring meeting, would I create it now?
- If I didn't have this item already, would I purchase it now?
- If I didn't have this person on my team, would I hire them now? (aka "keeper test")
- If I didn't have this stock in my portfolio, would I add it?
Any point the answer is "No", you should think about it. It doesn't __necessarily mean__ that you should get rid of it, because there are two types of friction:
* There might be "transaction costs", X is not the perfect hire but going through the hiring process might be too difficult, you wouldn't buy that car now, but changing cars is difficult, bid-ask spread in the stock portfolio.
* Just thinking about it has some cost
#published 2025-01-24