The Endowment Effect – Why We Overvalue What We Have

A new study states that

it appears that sellers, in comparison to buyers, focus on and over-represent the positive features, and under-represent the negative features, associated with the item.

Was there someone out there that didn't already know this? The last time I checked, over-representing the negative features didn't win you any sales awards.

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  • Applying set theory …

    Sellers have to position their product to ALL potentail buyers … so their set of positive attributes is all-encompassing.

    Buyers only have to understand a product from the perspective of those features that they INDIVIDUALLY find useful.

    From a sellers perspective, the set of positive attributes is obviously MUCH larger than that from any one Buyers perspective – when last did you use all the features on MS-word?

    Thanks for making me think this through Rob.

  • IMHO marketers would do much better if they stopped trying to be all encompassing and concentrated on being relevant to the buyer. Think of it as long tail marketing and selling. Of course making money out of the long tail requires a lot of individual listening sessions before you shape the pitch.

    And a company’s credibility would go up if they stopped blowing nothing but all encompassing sunshine up the market’s skirts and used some marketing money to really fix the negatives that buyers see.