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What is this behavioral economics experiment I am thinking of?
October 28, 2012 8:55 AM   Subscribe

What is this behavioral economics experiment I am thinking of?

There is an experiment in behavioral economics I am trying to find a source for. To the best of my recollection, it goes something like this:

- Participants are given the description of a company. Half the participants are told they will be selling the company. Half the participants are told they will be making a bid to buy the company.

- Participants are asked to do their best to come up with an honest, accurate assessment of the value of the company

- The result is that the participants asked to imagine they are selling the company come up with a significantly higher valuation than those asked to imagine they are buying it.

Now - it's very possible I'm remembering some detail wrong. I'm guessing it's likely that at least one details is wrong, because I keep trying to find it online, but I cannot. (For instance - maybe it is not a company they are buying/selllng? I am pretty sure it is but maybe I am wrong....)

Can anyone help me figure out what experiment I might be thinking of?

(I want to use the story in a presentation I'm giving about self-serving biases in sales situations)
posted by ManInSuit to Society & Culture (4 answers total) 2 users marked this as a favorite
 
Endowment effect.
posted by logicpunk at 8:59 AM on October 28, 2012


The classic experiment is the Kahneman et. al. (1990) experiment using mugs, as described in the Wikipedia article.
posted by MadamM at 10:15 AM on October 28, 2012


MadamM - Yeah, I know that one. But there was one I read about, someone, I'm sure of it, that's closer to what I described. Or did I imagine it?
posted by ManInSuit at 12:30 PM on October 28, 2012


incidentally, came across this experiment in some reading today and remembered this question.
Professor Howard Raiffa of the Harvard Business School
posted by uncreative at 12:38 AM on November 3, 2012


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