Video demonstration of what behavioral economists call the endowment effect.

From Wikipedia:

In psychology and behavioral economics, the endowment effect (also known as divestiture aversion and related to the mere ownership effect in social psychology^[1]) is the hypothesis that people ascribe more value to things merely because they own them.^[2][3]

This is typically illustrated in two ways.^[3] In a valuation paradigm, people will tend to pay more to retain something they own than to obtain something they do not own—even when there is no cause for attachment, or even if the item was only obtained minutes ago. In an exchange paradigm, people given a good are reluctant to trade it for another good of similar value. For example, participants first given a Swiss chocolate bar were generally unwilling to trade it for a coffee mug, whereas participants first given the coffee mug were generally unwilling to trade it for the chocolate bar.

A more controversial third paradigm used to elicit the endowment effect is the mere ownership paradigm, primarily used in experiments in psychology, marketing, and organizational behavior. In this paradigm, people who are randomly assigned to receive a good (“owners”) evaluate it more positively than people who are not randomly assigned to receive the good (“controls”).^[1][3] The distinction between this paradigm and the first two is that it is not incentive-compatible. In other words, participants are not explicitly incentivized to reveal the extent to which they truly like or value the good.

The endowment effect can be equated to the behavioural model Willingness to Accept or Pay (WTAP), a formula sometimes used to find out how much a consumer or person is willing to put up with or lose for different outcomes.

Examples

One of the most famous examples of the endowment effect in the literature is from a study by Daniel Kahneman, Jack Knetsch & Richard Thaler,^[4] in which participants were given a mug and then offered the chance to sell it or trade it for an equally valued alternative (pens). They found that the amount participants required as compensation for the mug once their ownership of the mug had been established (“willingness to accept”) was approximately twice as high as the amount they were willing to pay to acquire the mug (“willingness to pay”).

Other examples of the endowment effect include work by Ziv Carmon and Dan Ariely,^[5] who found that participants’ hypothetical selling price (willingness to accept or WTA) for NCAA final four tournament tickets were 14 times higher than their hypothetical buying price (willingness to pay or WTP). Also, work by Hossain and List (Working Paper) discussed in the Economist in 2010,^[6] showed that workers worked harder to maintain ownership of a provisional awarded bonus than they did for a bonus framed as a potential yet-to-be-awarded gain. In addition to these examples, the endowment effect has been observed using different goods^[7] in a wide range of different populations, including children,^[8] great apes,^[9] and new world monkeys.^[10]

Robert is now getting The Atlantic magazine.  He has never done so before.

Seems balanced.  About right for him.

In particular, in the July/August edition:

How the Democrats Lost Their Way on Immigration, by Peter Beinart, associate professor of journalism and political science at the City University of New York.

“Liberal immigration policy must work to ensure that immigrants do not occupy a separate legal caste. This means opposing the guest-worker programs—beloved by many Democrat-friendly tech companies, among other employers—that require immigrants to work in a particular job to remain in the U.S. Some scholars believe such programs drive down wages; they certainly inhibit assimilation. And, as Schachter’s research suggests, strengthening the bonds of identity between natives and immigrants is harder when natives and immigrants are not equal under the law.”

***

“The next Democratic presidential candidate should say again and again that because Americans are one people, who must abide by one law, his or her goal is to reduce America’s undocumented population to zero. For liberals, the easy part of fulfilling that pledge is supporting a path to citizenship for the undocumented who have put down roots in the United States. The hard part, which Hillary Clinton largely ignored in her 2016 presidential run, is backing tough immigration enforcement so that path to citizenship doesn’t become a magnet that entices more immigrants to enter the U.S. illegally.

***

“Exposure to difference, talking about difference, and applauding difference—the hallmarks of liberal democracy—are the surest ways to aggravate those who are innately intolerant, and to guarantee the increased expression of their predispositions in manifestly intolerant attitudes and behaviors. Paradoxically, then, it would seem that we can best limit intolerance of difference by parading, talking about, and applauding our sameness.”

The next Democratic presidential nominee should commit those words to memory. There’s a reason Barack Obama’s declaration at the 2004 Democratic National Convention that “there is not a liberal America and a conservative America … There is not a black America and white America and Latino America and Asian America; there’s the United States of America” is among his most famous lines. Americans know that liberals celebrate diversity. They’re less sure that liberals celebrate unity. And Obama’s ability to effectively do the latter probably contributed to the fact that he—a black man with a Muslim-sounding name—twice won a higher percentage of the white vote than did Hillary Clinton.

In 2014, the University of California listed melting pot as a term it considered a “microaggression.”What if Hillary Clinton had traveled to one of its campuses and called that absurd? What if she had challenged elite universities to celebrate not merely multiculturalism and globalization but Americanness? What if she had said more boldly that the slowing rate of English-language acquisition was a problem she was determined to solve? What if she had acknowledged the challenges that mass immigration brings, and then insisted that Americans could overcome those challenges by focusing not on what makes them different but on what makes them the same?

Some on the left would have howled. But I suspect that Clinton would be president today.”

What Inspired the Summer of Love, Mostly Drugs, by James Parker, contributing editor.

Robert and his lawyer-friend Josh Koltun returned late last night from Sequoia Kings Canyon National Park where they completed the 42-mile (or 46-mile, or 49-mile, whatever) Rae Lakes Loop backpacking hike. This is one of the most popular hikes in the Sierra. It includes about 20 miles worth of the PCT/John Muir Trail. Robert and Josh survived car-swallowing raging rivers, hard granite trails, lots of bears and rattlesnakes, Glen Pass, and, most frightening, Don Chuy’s Taqueria in Madera.  It was a tough one for old guys.  Lots of blisters and achy joints.  But well worth it for the sense of accomplishment and access to beautiful scenery.

The Pierce’s only get one summer vacation this year, so they chose a surf safari down to SoCal.

Wow. Two days at Doheny beach, punctuated by sleepless nights at San Onofre campground by the sea. Good ol’ San O.

And, surfing!

Then one night in the Gutierrez’ backyard.

There was lots of high-stakes tennis going on today out at Lafayette Tennis Club.

Rory “the Player” Pierce was in action in his first appearance on the circuit.  All went well. Four matches and he got on the board each time.  He even won one.  But it’s all about having fun . . . right? Right?  Isn’t it?

Results here.

The carnage continues in Mosul.

Meanwhile, Rory, Cadie and Robert spent yesterday afternoon playing nine holes of golf at the local bayside course. This was the kids’ first outing.  Thus, completing the perfect triangle of utterly bourgeois pastimes undertaken by the Pierce family. Tennis – Yacht Racing – Golf.