Merely owning something raises the price at which a person will part with it.
Thaler's mug experiments: people given a mug demanded roughly twice what people not given one would pay for it. Recent work suggests the effect is weaker than first reported and partly an artefact of the exchange procedure.
In practice
- A team asked to give up a meeting slot they were assigned defends it far harder than they would have fought to get it.
- A household prices its own car at what it feels worth to own, and every buyer prices it at what it is worth to buy.
- Possible explanations
- One explanation is loss aversion, with ownership setting the reference point so that giving up counts as a loss. Another is that owning a thing draws attention to its good features. A third is procedural, since unfamiliar exchange tasks can confuse participants.
- In its favour
- The finding replicates widely, and it fits field evidence on inertia in trading and on how hard people find it to sell inherited assets.
- Against it
- It is weaker than first reported, shrinks with market experience, and diminishes under procedures designed to remove confusion about the task.
- Standing
- Weaker than first reported, and partly an artefact of the exchange procedure used to measure it.
- Further reading
- Wikipedia
- Subject
- Decision-making & Reasoning
- Essay
- The catalogue of predictable errors