The mug that changed value when it crossed the table

In experiments associated with Richard Thaler and colleagues, some participants received mugs and others did not. Owners commonly demanded more to give up a mug than non-owners were willing to pay to acquire one. The object had barely moved, yet possession appeared to change the reference point from possible gain to felt loss.

The “endowment effect” helped behavioural economics challenge the tidy assumption that preferences exist unchanged before a transaction. Experiments vary with design, experience and market setting, so the mug is not a law of every sale. It remains a compact object-history of an idea: ownership can alter valuation before the object itself alters at all.