Tag Archives: endowment effect

Blog Psychology Pt 3: The Mere Ownership Effect and the Endowment Effect

I love that name, don’t you? It makes it sound like it’s so insignificant–mere ownership, you know. I merely own this car, I merely own that book.

But no. What the psychologists are getting at here is that the mere act of owning something appears to change people’s opinions towards whatever it is that they own. By taking the simple step of buying something, you are pretty well guaranteed to like it more than if you hadn’t bought it. In experiments, for example, researchers compare the price that sellers are willing to part with a given object for, to price that non-owners are willing to spend to acquire it, and find consistently that the mere act of owning a given object gives that object more value to the owner than the marketplace is willing to recognize.

Buyer beware, indeed: once something is in your hot little hands, you will almost certainly find it worth more than it really is.

Through some tricky experimental conditions, psychologists believe that it is the association through ownership of the object with the Self that leads to the over-evaluation of the object. Basically: “Since I own this whatever-it-is (coffee mug, book, car), and I am a pretty fabulous person, therefore this object is pretty fabulous as well, and I’ll need a lot of money to willingly part with it.”

Neat, huh?

But wait, there’s more! There’s also the Endowment Effect.

Which finds that people also over-value what they are given The act of giving creates a relationship, which alters what people feel is acceptable and not acceptable in terms of ethical and fair behaviour, including beliefs.

What does this mean for you, hapless readers of sponsored blog posts?

It means you can’t trust a word of them.

It means that the mere act of having been given a product or service to review is likely to unconsciously and unavoidably alter the opinion of the blogger.

It means that there is no way not to sell out, for most of us, as soon as transactions enter the picture; and that the blogger is not going to be a reliable narrator so far as they will be able to honestly evaluate their own tendency to be affected by ownership.

Again, this doesn’t meant that they’re lying. It doesn’t mean that they are aware of the opinion changes that ownership brings.

But it also means that you, as a blog reader looking for solid and unbiased opinions on products and services, would almost certainly be better off asking someone who borrowed them.

And it means that for those of us who write reviews of products or services on our blogs–compensated or not–we need to keep in mind that the ownership and the endowment both may have affected our opinions in ways we’re not conscious of, and that it is ok for readers to question us. Critical reading and thinking are good things, and anyone who asks how reviews are affected by sponsorship is well within their rights to do so. It’s not an insult; it’s not an attack; and it’s not personal.