The Psychology of the Endowment Effect

"Price is what you pay; value is what you get." 

That which is 'ours', family, sports team, free agent infielder has higher value to us. How do we prove that?

Experimental Proof of Concept

Economist Richard Thaler set up an experiment in a class where half the class was given mugs to sell and the other half asked to "bid" on the mugs. In effect, he set up a market for the mugs. The "owners" set the average price at $5.25 and the buyers thought $2.25 was the fair price. Ownership distorted the price. 

Desperately Seeking Objectivity

• Ownership impacts our value judgments. 
• The player will be 32 when the baseball season starts, with 62 RBI, 18 homers, and a WAR (wins above replacement) of 3.5 A team was willing to pay $35 million annually for five years. Good for Alex Bregman and possibly probably an overpayment for an oft-injured player. That's also Thaler's "winner's curse," overbidding. 
• As they say on Wall Street, "a stock doesn't know you own it." 

Volleyball and Sports Make It Personal

• Nobody has more ownership than a player. It's hard to be clear-eyed about one's talent, minutes, or prospects. 
• Parents have an equally large stake. In addition to parental love, they've sacrificed time and money in development costs
• The "inside view" comes from watching practice regularly. As Ron Howard says, "The director is the keeper of the story" and also has their job on the line. 

Asking people to ignore the Endowment Effect is like asking them to ignore the weather. We're vulnerable to forces beyond our control. 

Lagniappe. Players are not machines. 

#Patriots HC Mike Vrabel on the importance of mental health and the role coaches play:

“I get to see these guys every single morning… I see their faces. So, after a few weeks you know when things [are off]... Don’t just ask somebody how they’re doing. There’s a follow up to… pic.twitter.com/mBAQfFypL9

— Carlos A. Lopez (@LosTalksPats) February 25, 2026