Endowment Effect : Behavioral Economics (Your Stuff Are More Valuable Than Others' Stuff?) скачать в хорошем качестве

Endowment Effect : Behavioral Economics (Your Stuff Are More Valuable Than Others' Stuff?)

When you order a coffee at a small coffee shop, sometimes, they may put your name on the coffee cup. Of course, maybe the reason for them to do that is to distinguish your coffee with other customers. However, sometimes, they will still do it even if there is only one customer. If you are the customer and get a cup of coffee with your name on it, compared with a blank coffee cup, which one do you think is more valuable? A large percentage of people will choose the one with the name on it. That is what endowment effect can explain in this video. It indicates that we will think the items we own are more valuable than the ones owned by others, although they are the same items. This theory can perfectly explain the previous coffee cup example. Since most of us will be sensitive to our names. If we have a paper cup with my name on it, I'll consider it to be more valuable than other cups, although they are not. The coffee shop staff may do it inadvertently to avoid confusion. However, as the old saying goes: many things grow in the garden that were never sown there. They inadvertently take advantage of the endowment effect to boost their sales. Here is another example. If you spent $500 to buy a laptop but you felt that it didn't suit your needs. So, you decided to sell it on eBay. Since you didn't use it a lot, you think it is still worth at least $450. However, the buyer may think it has already been used for some time and it is worth at most $300. Of course, everybody wants to buy cheap stuff. But for you, since you will think it is yours, and you consider it will be worth more than everybody else's quote. There is a famous experiment about Endowment effect. A few people attending the testing are randomly separated into two groups. In the first group, the tester will give everyone a cup as a gift. Similarly, in group two, the gift will be a chocolate bar. Then the tester told all people that they can choose either a cup or a chocolate bar as a gift. This means that, if they like, they can freely exchange the one they already have to another gift. If it is a pure statistical question, there should be 50% of the people choosing to exchange their gift. However, the results show that only 10% of the people are planning to do the exchange. Most of the attendees will like to keep their original gift. Experiments show that when something is lost, the misery imposed on people's mind will be much stronger than the happiness when they get a new one, and the ratio of misery and happiness for the same item is roughly about 2:1. That means, if we lost $100, the sadness from this event will be equal to the happiness from the event that we get $200. That can explain why we don't want to give up the one we already own because we emotionally think that losing it will make us more sad. Coming back to the marketing strategy, nowadays, there are numerous strategies which are making use of endowment effect. The most common strategy is the free trials or full refund for a few days. When the customers already get used to the product, they will consider it as their own stuff and will be reluctant to send it back to the seller. The seller might inadvertently offer that full refund period to improve the quality of service, however, when the endowment effect is starting to take effect, the sellers will get more benefits from that policy. Attribution: https://pixabay.com/photos/beautiful-...