We show how the endowment effect can be interpreted in terms of ambiguity aversion. Agentstake status quo as their reference point, relative to which they evaluate potential trades. The valueof an exchanged good is ambiguous, represented by a set of probability distributions overpossible values. Agents are ambiguity averse, modeled as maxmin expected utility maximisers.Hence, for any given price, sellers focus on the case of a high value good, and buyers focus onthe case of a low value good. Consequently, the sellers’ willingness to accept (WTA) is inflatedand buyers’ willingness to pay (WTP) is deflated, resulting in an endowment effect. Assumingthat agents incorporate new information via Bayesian updating of the set of priors, we show thatinformation decreases the WTP–WTA gap. In this way our model can account for the empiricalfacts that the endowment effect is mitigated by physical contact with the good, decreasing inexperience, larger for non-market goods, and more dependent on possession of the good than onownership.