Comments on: What is this behavioral economics experiment I am thinking of?

Question: What is this behavioral economics experiment I am thinking of?

ManInSuit — Sun, 28 Oct 2012 08:55:47 -0800

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)

By: logicpunk

logicpunk — Sun, 28 Oct 2012 08:59:02 -0800

Endowment effect.

By: MadamM

MadamM — Sun, 28 Oct 2012 10:15:36 -0800

The classic experiment is the Kahneman et. al. (1990) experiment using mugs, as described in the Wikipedia article.

By: ManInSuit

ManInSuit — Sun, 28 Oct 2012 12:30:38 -0800

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?

By: uncreative

uncreative — Sat, 03 Nov 2012 00:38:26 -0800

incidentally, came across this experiment in some reading today and remembered this question.
Professor Howard Raiffa of the Harvard Business School