“Mine!”: The Psychology of Possession

Written by: Bill Sherman on Saturday, 28 June 2008, 3:58 PM

In Pixar’s 2003 film, Finding Nemo, there’s a delightful gag that’s portrayed by a cacophany of seagulls. They all cry out “mine!” in an unending chorus as they chase and squabble over their food.

Scientists have shown that we put more value on an item because we can call it “mine.” It’s been named by researcher Richard Thaler as the “endowment effect.”

the endowment effect has been seen in hundreds of experiments, the most famous of which found that students were surprisingly reluctant to trade a coffee mug they had been given for a bar of chocolate, even though they did not prefer coffee mugs to chocolate when given a straight choice between the two.

Moreover, it is now possible to see the effect in the brain. In the June 12th edition of Neurone, Brian Knutson of Stanford University describes a brain-scanning study he carried out recently. The pattern and location of the activity he observed suggests the endowment effect works by enhancing the salience of possible loss. [“It’s Mine I Tell You.” Economist. June 9, 2008]

We invest more value into things because they are “ours.” I wouldn’t be surprised if that principle also causes us to hang onto things, even when a rational external perspective would tell us to let them go.

You might know someone who is a packrat. You may even know someone who clings to a pattern of behavior or an idea that has long past its usefulness.

The phrase “this is how I roll” provides an excuse for us to make irrational decisions and continue habit-formed behaviors.

An entrepreneur may cling to a business model longer than it remained viable. A person may remain in a marriage even though they know it has failed years ago. Yes, these behaviors come close to “sunk costs,” but they also differ because the person can say “It’s my business or even its my job.”

A bird in the hand is worth two in the bush? Well, it all depends on the value of the birds, doesn’t it? If bird in your hand is a seagull, and the ones in the bush are hyacinth macaws . . .

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