We evaluate the exact same options differently depending on whether we consider them simultaneously (called joint evaluation) or in isolation (called separate evaluation). When researchers asked people to estimate the value of two dictionaries—a used one with 20,000 words and a new one with 10,000 words—their answers differed based on evaluation mode: separately, the 20,000-word one was valued higher; simultaneously, the 10,000-word one was higher. Understanding your evaluation mode can help guide your eventual decision—especially considering that we typically compare choices simultaneously, but experience the eventual choice in isolation.
What are your most valuable possessions worth? Usually not as much as you think, according to the endowment effect. One study gave a group of undergraduates coffee cups and another group nothing, and asked participants to estimate a selling and a buying price, respectively. The cup owners wanted no less than $5.25, while the buyers wouldn’t pay more than $2.25 to $2.75. Recent research suggests we overvalue our possessions because “ownership” creates an association between the item and our self-identity—even simulated ownership, like trying on clothes, could have a similar effect.