But before we continue it's short story time…
We all know about the Titanic and its tragic collision with a massive iceberg back in 1912. What many don’t know is that crew’s spotters had no access to binoculars the night of the crash. A rather late change sent a sailor to another ship, that sailor had the key (in their pocket) to the locker that contained a pair of binoculars up in the crow’s nest.
A crew member who survived the Titanic disaster, lookout Fred Fleet, later insisted that if binoculars had been accessible, they would have spotted the iceberg with enough time for the ship to take evasive action.
Although not a perfect example, It does lend itself as a wonderful example to illustrate this principle in action.
**There have been rather comprehensive studies into why widespread standard operating procedures in 1912 did not include a single set of binoculars specifically designated for the lookouts or for the crow’s nest. Regardless of the rationale of the decision-making at the time, (they did their best with the information they had at the time) let’s not get bogged down with those nuances.**
Now Imagine if they would have known the difference that singular action could have had on the lives of thousands of people and history as a whole. The simple action of having a designated set of binoculars for the ship's spotters.
If the status quo just slightly underperforms constantly, we often fall into a trap of inertia where there isn’t enough momentum to drive a change.
Alternatively, when the status quo is terrible, it's easy to get people to change. If your place is infested with rats, you HAVE to call an exterminator, the only question is which one.
So to overcome The Endowment Effect, we must help people realize the cost of inaction, the cost(s) of doing nothing.