The Endowment Effect, Loss Aversion, and Status Quo Bias

Economics can be distinguished from other social sciences by the belief that
most (all?) behavior can be explained by assuming that agents have stable,
well-defined preferences and make rational choices consistent with those preferences
in markets that (eventually) clear. An empirical result qualifies as an
anomaly if it is difficult to "rationalize," or if implausible assumptions are
necessary to explain it within the paradigm. This column presents a series of
such anomalies.