The mere fact of owning something (psychologically) increases the value of the thing. Managers can take advantage of what is called the “ownership effect” when it comes to change.
Downloads: Knowledge.blitz (222)
Imagine that you want to reorganize the office rules in your department. This requires some employees to change offices. But surprisingly, you encounter resistance: many want to keep their old desks. Even colleagues sitting in completely unattractive desks don’t want to move.
In practical life, we frequently encounter situations in which the value of something is evaluated differently. Research has shown that property plays an important role in assessing value and can easily distort it.
I love him because he is mine!
In a study, the Kahneman Research Group (1990) examined how the value of things changes through ownership. To do this, they gave half of the study participants a cup of coffee with the option to sell the cup, while the other half could buy the same cup of coffee. It turns out here that buyers were willing to pay just over $2 for the cup, while the owners of the cup didn’t want to sell it for less than $5. A difference in value of about 50% has also been shown for other things: once things are owned, their value increases rapidly. This effect has been researched as the endowment effect.
Research since then has shown that there isn’t even that actual Possession is necessary to increase the value of the item: it is enough to feel that an item belongs to you in some way, i.e. Myself Property. Even if the office, computer, or company car is already owned by the company, habit and frequent use contribute to the fact that these things feel psychological like owning them – and thus increase their value. Once this limit, the sensed “angel” easily falls into the trap of overestimating the value of the thing.
do not touch! you may love it
Interestingly, it can be very easy to feel that you own something: Peck and Schuh (2009) have shown that just touching something makes you feel like you already have it. As a result, the value of the property is already increasing. In many vending situations, this is often used by allowing people to pick up a new cell phone or test drive a car.
Take advantage of the effect
As a leader, if you run into walls when it comes to renovations taking place due to the impact of ownership, first try to understand why this resistance occurs. It is clear that the loss of a valuable “possession” is worse than the acquisition of a new possession. This makes sense in so far as the new is not yet benefiting from the effect of ownership. However, as a manager, you can also take advantage of the effect of changes – or even when no changes are necessary (see box).
Benefit from the effect of ownership:
- If separation of “properties” is necessary: use a ritual that does justice to psychological significance (for example, a farewell party in the office or handing a door panel to a loved one).
- Encourage a sense of psychological ownership of new things among employees with small liberties (such as designing a free office, or talking about your “new office” instead of your “new office”).
- Use the touch effect with new things (eg, take a new computer home with you, let employees try on new office chairs, give them clothes to try on).
- If desired renovations are not possible, confirming ownership of the “old stuff”, then the employees can also be satisfied with what is still there.
- When evaluating the value, never trust the owner! Ask an independent third party to assess the value.
- If the goods are redistributed: first estimate the value of the goods with everyone involved (eg, what are the advantages and disadvantages of the office? How do you compensate for the defects?) and only then distribute them (eg by drawing lots).
Publications: Kahneman, Dr.; Knech, J.L., and Thaler, R.H. (1990). Empirical tests of the endowment effect and coast theory. Journal of Political Economy, 98, 1325-1348. Beck, G. & Shaw, S.P. (2009). The effect of mere touch on perceived property. Journal of Consumer Research, 36, 434-447.
Please quote as follows: Macchi, C (2022). Possession effect. Knowledge blitz (222). http://www.wissensdialoge.de/besitztumseffekt