Ownership Bias

We value things more when we feel we own them

We’re willing to pay more for and are increasingly reluctant to exchange what we sense is ours, next to an exact same item that we don’t own.

Knetsch, J. L. (1989). The endowment effect and evidence of nonreversible indifference curves. The American Economic Review, 79(5), 1277-1284.

The study

Setup

218 people were split into 3 groups, given either a coffee mug or a chocolate bar and told they could swap their item for the other; or given neither and told they could choose either.

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Results

Those who’d been endowed with either item were far more likely to stick with it than those who were given neither.

np_read_2490885_000000

Knetsch, J. L. (1989). The endowment effect and evidence of nonreversible indifference curves. The American Economic Review, 79(5), 1277-1284.

Key Takeaways

Perceived ownership is powerful, allowing consumers to attribute increased value and emotional connection on what you’re offering, creating a strong desire to buy that increases over time.

It’s driven by a price gap between how much we’re willing to pay for an item and the price we’re willing to sell it for. This is due to a mix of Loss AversionFraming (i.e. buyer or seller) and the evolutionary advantage of overvaluing our tradable possessions. Doing so increases our resources and chances of survival.   

Allow people to feel ownership of a product prior to purchase. Examples include: making it effortless to add that product to their basket, visually personalizing a product early in the ordering process, highlighting how soon it could be at your door or allowing free week-long test drives of that car you’ve always wanted.

Ownership Bias

We value things more when we feel we own them

We’re willing to pay more for and are increasingly reluctant to exchange what we sense is ours, next to an exact same item that we don’t own.

Knetsch, J. L. (1989). The endowment effect and evidence of nonreversible indifference curves. The American Economic Review, 79(5), 1277-1284.

The study

Setup

218 people were split into 3 groups, given either a coffee mug or a chocolate bar and told they could swap their item for the other; or given neither and told they could choose either.

Results

Those who’d been endowed with either item were far more likely to stick with it than those who were given neither.

Key Takeaways

Perceived ownership is powerful, allowing consumers to attribute increased value and emotional connection on what you’re offering, creating a strong desire to buy that increases over time.

It’s driven by a price gap between how much we’re willing to pay for an item and the price we’re willing to sell it for. This is due to a mix of Loss AversionFraming (i.e. buyer or seller) and the evolutionary advantage of overvaluing our tradable possessions. Doing so increases our resources and chances of survival.   

Allow people to feel ownership of a product prior to purchase. Examples include: making it effortless to add that product to their basket, visually personalizing a product early in the ordering process, highlighting how soon it could be at your door or allowing free week-long test drives of that car you’ve always wanted.

Ownership Bias

We value things more when we feel we own them

We’re willing to pay more for and are increasingly reluctant to exchange what we sense is ours, next to an exact same item that we don’t own.

The study

Setup

218 people were split into 3 groups, given either a coffee mug or a chocolate bar and told they could swap their item for the other; or given neither and told they could choose either.

Results

Those who’d been endowed with either item were far more likely to stick with it than those who were given neither.

np_read_2490885_000000

In detail

Pairings

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Connected to

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Ownership Bias

is included in Box One of our physical workshop tool.
is included in Box Two of our physical workshop tool.
Box Two