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The Daily Decision-16-Endowment effect … How much does something cost? Depends on who owns it

The Daily Decision-16-Endowment effect

Hello Hello This is Dr. Z, Zachary Brooks, with The Daily Decision

because you want to make better decisions.

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Today is the SIXTEENTH episode of The Daily Decision

 How much is a basic coffee mug worth?

It depends.

  • If you want it, not very much.
  • If you have it, very much.

That’s the result of findings from Kahneman, Knetsch & Thaler (1991).

Participants were either owners or buyers. If they simply sat down next to the mug, they suddenly valued the mug at $7.12 on average. If they were asked to act as buyers, they valued the mug at $2.87.

What explains the difference?

The endowment effect. That is people like and value the things they own (or perceive to own) higher than things that they could own.

The next time you try to bargain for something on eBay, remember that owners and buyers value the same item differently.

Subscribe to Dr. Z Podcasts to follow other programs such as the People Behind the PhDs, Organ Oracles, and Leaders on the Line. All podcasts are based on my upcoming book. The 6A’s a practical philosophy for living life with meaning and purpose.

 Follow me at DR-Z.net, iTunes, and Facebook at DRZPodcasts.

If you have an idea for a podcast, contact me and maybe we can find a way to create your own podcast produced by me, Dr. Z

 As always, Happy Deciding.

 

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