Last night I went to a Primal Scream concert. They were performing their 1991 Screamadelica album live, and it was too rare an occasion to miss, despite the hefty price tag.
We joined the queue to get in to the venue, to go through the security checks, and then I was immediately seduced by the merchandise stall (cleverly positioned next to the entrance). Until this point, I hadn’t felt any urge at all to possess any Primal Scream related merchandise, but for some reason, I immediately started to consider how lovely that mug was with the Screamadelica logo on.
It was priced at £10, which I thought was probably the most I’d be willing to pay for it. So I did. So far, not too terrible. I’d fallen for some clever merchandising, but hey, who doesn’t now and then?
The concert was excellent. But the main story begins when we left. I couldn’t fit the mug into my handbag, and to be honest, was slightly regretting buying it – I was wondering whether I should have bought the tote bag instead. We got onto a crowded train with some rather drunk fellow concert-goers.
Rather inebriated man 1: “It’s a Screamadelica mug! You’ve got a Screamadelica mug! Look, she’s got a Screamadelica mug! Where did you get the Screamadelica mug?”
Me: “I bought it.”
Slightly inebriated man 2: “I’ll give you £10 for that! It’s a Screamdelica mug!”
Me (bemused, not inebriated): “No, you’ll have to go higher.”
Inebriated man 3: “I’ll give you £12! Look, she’s got a Screamadelica mug!”
A bidding war broke out. £15. £25. At one point, two of the inebriated men were offering to buy the mug to share and had pooled their pocket money to make up a total of £37.50.
Me: “No, it’s not for sale.”
Dear reader, two sickening minutes later as I got off the train, I realised I had fallen prey to the endowment effect: whereby you value something more once you own it. It hurts too much to part with it once you have it. Even worse, one of the most famous papers on this involves an experiment looking at how ownership changes how much people value… mugs.
Five Minute Economist