{"id":3217,"date":"2021-05-30T23:53:25","date_gmt":"2021-05-30T23:53:25","guid":{"rendered":"https:\/\/www.promotionproducts.com.au\/blog\/?p=3217"},"modified":"2021-05-31T01:01:46","modified_gmt":"2021-05-31T01:01:46","slug":"promotional-mug-endowment-effect","status":"publish","type":"post","link":"https:\/\/www.promotionproducts.com.au\/blog\/promotional-mug-endowment-effect\/","title":{"rendered":"How A Universities Promotional Mug Helped Us To Understand The Endowment Effect"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Featured in the book &#8220;Misbehaving&#8221; by behavioural economist Richard Thaler the now &#8220;mug experiment&#8221; plays a big part in shaping the current academic understanding of the <a href=\"https:\/\/en.wikipedia.org\/wiki\/Endowment_effect\">Endowment Effect<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The experiment involved giving some students a <a href=\"https:\/\/www.promotionproducts.com.au\/category\/mugs-and-eco-cups\">promotional coffee mug<\/a> printed with the Universities emblem and others nothing.  They then ask all participants how much they would be willing to purchase the mug for (those that didn&#8217;t own it) and how much those that did own it would sell it for.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Read on to learn what the heck the Endowment Effect is and more details regarding the experiment.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is the Endowment Effect?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">In behavioural economics and psychology the endowment effect is related to the mere ownership of objects.  <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It finds that people are more likely to retain an object they own than to acquire the same object when they do not own it.  <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Meaning that we tend to place greater value on goods we already own than identical items we do not own.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The endowment effect is theorised to be in part due to human&#8217;s tendency to be loss-averse.  Meaning that we tend to feel a loss more than we would feel a gain for that same value.  According to some studies, this may be even twice as much.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There are also other theories about why the endowment effect exists such as the <a href=\"https:\/\/en.wikipedia.org\/wiki\/Mere_ownership_effect\">Mere Ownership Effect<\/a> and the <a href=\"https:\/\/en.wikipedia.org\/wiki\/Status_quo_bias\">status quo bias<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">&#8220;The Mug Study&#8221; Endowment Effect Experiment<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The study was carried out at Cornell University by Richard Thaler, Daniel Kahneman and Jack Knetsch.  <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The experiment was simple, half of the subjects (students) were given Cornell University Coffee Mugs and the other half were not.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">They were then asked how much they would be willing to buy or sell the mug for.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">All things equal you would assume that the average price of both selling and buying the mug would be fairly close.  But that wasn&#8217;t the case.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The students that received the mugs were not willing to sell them for less than $5.25 on average compared to the other group of students who were prepared to buy them for between $2.25 and $2.75 on average.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is the endowment effect in action.  Similar experiments to this have been conducted around the world with similar results.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"600\" height=\"400\" src=\"https:\/\/www.promotionproducts.com.au\/blog\/wp-content\/uploads\/2021\/05\/My-Post-5.jpg\" alt=\"The Mug Experiment Graphic\" class=\"wp-image-3228\" srcset=\"https:\/\/www.promotionproducts.com.au\/blog\/wp-content\/uploads\/2021\/05\/My-Post-5.jpg 600w, https:\/\/www.promotionproducts.com.au\/blog\/wp-content\/uploads\/2021\/05\/My-Post-5-480x320.jpg 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) 600px, 100vw\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Summing Up<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The endowment effect (and its power) is something that all business owners and marketers should be aware of.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It&#8217;s also a piece of why promotional products are so effective.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To the delight of University bookstores\/merchandise stores around the world, this experiment has frequently been replicated with great success.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Featured in the book &#8220;Misbehaving&#8221; by behavioural economist Richard Thaler the now &#8220;mug experiment&#8221; plays a big part in shaping the current academic understanding of the Endowment Effect. The experiment involved giving some students a promotional coffee mug printed with the Universities emblem and others nothing. They then ask all participants how much they would [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":3225,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","content-type":"","_uag_custom_page_level_css":"","footnotes":""},"categories":[72],"tags":[],"class_list":["post-3217","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-marketing-branding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How Promotional Mugs Showed The Endowment Effect In Action<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.promotionproducts.com.au\/blog\/promotional-mug-endowment-effect\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Promotional Mugs Showed The Endowment Effect In Action\" \/>\n<meta property=\"og:description\" content=\"Featured in the book &#8220;Misbehaving&#8221; by behavioural economist Richard Thaler the now &#8220;mug experiment&#8221; plays a big part in shaping the current academic understanding of the Endowment Effect. 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The experiment involved giving some students a promotional coffee mug printed with the Universities emblem and others nothing. They then ask all participants how much they would&hellip;","_links":{"self":[{"href":"https:\/\/www.promotionproducts.com.au\/blog\/wp-json\/wp\/v2\/posts\/3217","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.promotionproducts.com.au\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.promotionproducts.com.au\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.promotionproducts.com.au\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.promotionproducts.com.au\/blog\/wp-json\/wp\/v2\/comments?post=3217"}],"version-history":[{"count":6,"href":"https:\/\/www.promotionproducts.com.au\/blog\/wp-json\/wp\/v2\/posts\/3217\/revisions"}],"predecessor-version":[{"id":3678,"href":"https:\/\/www.promotionproducts.com.au\/blog\/wp-json\/wp\/v2\/posts\/3217\/revisions\/3678"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.promotionproducts.com.au\/blog\/wp-json\/wp\/v2\/media\/3225"}],"wp:attachment":[{"href":"https:\/\/www.promotionproducts.com.au\/blog\/wp-json\/wp\/v2\/media?parent=3217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.promotionproducts.com.au\/blog\/wp-json\/wp\/v2\/categories?post=3217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.promotionproducts.com.au\/blog\/wp-json\/wp\/v2\/tags?post=3217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}