efeito
Endowment effect
People tend to assign more value to things they already own, even if their ownership is recent or irrelevant.
Don’t take away what you have already given. If you must take it away, warn first and say what goes in its place.
Simply having something is enough to start charging more for it. In the classic experiment, half of a class received mugs at random and the other half did not. Those with the mug in hand asked about twice as much to sell it as the others offered to buy it, and nothing had changed in the object: what changed was which side of the table it was on. Having and not having are not the same calculation with the sign flipped. They are two different sums, and the one done by whoever already has it always comes out higher.
What the brain does with it
The biological mechanism behind the effect, and how much of it was actually measured.
The effect is associated with loss aversion: once something is perceived as ours, giving it up comes to weigh more than acquiring it did. The same object is worth more in the hand of whoever has it. KnutsonOne reference in this work:2008Neural antecedents of the endowment effectSee in the bibliography → and colleagues measured this inside the scanner in 2008, with 24 people buying, choosing and selling the same six products at eighteen prices. When selling, activation of the right insula in front of the preferred products predicted the size of each participant’s endowment effect. The authors’ reading is that ownership increases value by highlighting the possible loss. The orbitofrontal cortexIt sits right behind the eyes and assigns value: whether the thing is worth it, whether it is pleasant, how much it costs in effort. It answers before the person knows they asked.See it in Emotion →See in the glossary → and the ventral striatumPart of the reward circuit that tallies gain and loss. It reacts more strongly to losing than to gaining the same amount — the asymmetry behind a good part of the decision biases in this catalogue.See in the glossary → appear in studies of value assessment, but their link to this effect is still a bridge of mine.
The body this law presumes
Who it was measured on, and what changes when the body on the other side is another.
The study that measured effect and structure together had 24 participants, in a university laboratory in the United States. MadduxCompared Westerners and East Asians on the endowment effect and found the effect stronger in the former.One reference in this work:2010For whom is parting with possessions more painfulSee in the bibliography → and colleagues measured Westerners and East Asians in 2010, and the effect came out stronger in the former. ApicellaWent looking for the endowment effect among the Hadza, in Tanzania. In the most isolated groups the effect simply does not appear.One reference in this work:2014Evolutionary origins of the endowment effect: evidence from hunter-gatherersSee in the bibliography → and colleagues went further in 2014 and looked for the effect among the Hadza, in Tanzania: in the more isolated groups it does not appear, and in those who live alongside tourists it does. The effect tracks exposure to the market, not the human mind in general.
How design translates it
What to do with it on a screen, without turning a finding into a rule.
How to measure this in your product
Even symbolic ownership breeds attachment, whether it is creating an avatar, personalising a profile or building a playlist. Health apps keep people loyal through the history they have built, and that same attachment charges a price. A redesign that takes away something the person considers theirs generates immediate resistance, even when the new version is objectively better, and if you must take it away, warn first and say what goes in its place.
Where it breaks
Where the law does not hold, holds less, or holds in reverse.
As a retention argument, the effect turns into lock-in. Making data export hard uses against the person the attachment they themselves built. And there is a limit before that one. In 2005, PlottOne reference in this work:2005The willingness to pay-willingness to accept gap, the “endowment effect”, subject misconce…See in the bibliography → and Zeiler showed that the gap between the seller’s price and the buyer’s disappears when the experiment trains the participant until they understand the bidding mechanism, which suggests that part of the effect is procedural confusion and not attachment. The dispute is not over, because in 2015 an attempt to replicate Plott and Zeiler failed. What can be claimed is that the effect shows up, and less firmly than its fame suggests.
Um caso
A real product where this showed up, with what happened and where to check it.
The free trial doesn’t demonstrate, it delivers
In a classic experiment from 1990, half of a class received a mug, and the other half did not. Minutes later, everyone traded. Those without a mug offered about US$ 2.50 to buy one. Those who had one asked US$ 5.25 to sell theirs. It was the same object, and the price doubled just by changing hands. Almost no trades happened. That is the sum the thirty-day free trial is doing. It doesn’t show the product, it delivers the product. When the period ends, the person is not deciding whether to buy something new, but whether to give up something that was already theirs, and the two questions give different answers in the same brain. The same mechanism explains the disproportionate anger when a feature that almost nobody used disappears.
Kahneman; Knetsch; Thaler, 1990
Neighbouring concepts
Structures linked by a bridge of my own
- orbitofrontal cortex
- ventral striatum
Sibling concepts
Fontes
Enunciado citado de Kahneman; Knetsch; Thaler, 1991.
- KAHNEMAN, D.; KNETSCH, J.; THALER, R. Anomalies: the endowment effect, loss aversion, and status quo bias. Journal of Economic Perspectives, v. 5, n. 1, p. 193-206, 1991. DOI
- KAHNEMAN, D.; KNETSCH, J. L.; THALER, R. H. Experimental tests of the endowment effect and the Coase theorem. Journal of Political Economy, v. 98, n. 6, p. 1325-1348, 1990. DOI
Leitura complementar: Endowment Effect IxDF em inglês