Updated: 24/10/2025 por Jennifer Delgado | Published: 06/08/2025
Anyone who has tried to sell a car or a house will know that the owner and the buyer rarely see the price from the same perspective. Both want the best price, but that means their interests are at odds, as one wants the price to go down and the other wants it to go up.
However, beyond this disagreement (which is completely normal), there are people who ask for truly exorbitant and unrealistic prices. Why?
Experts say that owning something (whether real or virtual) has a strange effect on most people; it’s what’s known as the “Owner Effect.” But before diving into this phenomenon, it’s worth taking a look at a curious experiment conducted at Duke University.
The differences between owners and buyers
At Duke University, as at most colleges and universities, basketball tickets are worth their weight in gold. In fact, they’re so coveted that they’re offered through a lottery system. As you might guess, as soon as the winners are announced, there are people who have something that others desperately want. Thus, this became the perfect setting for Dan Ariely to examine the psychology of buying and selling.
The researchers entered this market as ticket resellers. They sat down with a group of students who had tickets and another group who didn’t have them but wanted to buy them. They followed the buying and selling process until both groups agreed on a price.
They found incredible disparities between sellers and buyers. The average price buyers were prepared for was $166 (very reasonable and fair for just a few hours of entertainment). But the surprise was even greater because sellers wanted to sell their tickets for an average price of $2,411. Obviously, no buyer was interested in this offer, no matter what the sellers said. But did the sellers really expect to make these profits?
The Landlord Effect in action
These crazy and irrational prices are explained by four effects that we experience when we own something:
1. Ownership increases perceived value: As soon as we acquire something, we begin to feel attached to this object and, therefore, its value to us increases.
2. Tendency to focus on losses: When we sell, we tend to focus on the item we’re losing rather than the amount of money we’re making. Thus, our natural aversion to feeling bad and our desire to keep the item lead us to ask for unreasonable prices.
3. We assume others share our perspective: We think others understand our attachment to the object when in fact they don’t. The other person is usually only interested in getting the lowest possible price and, since they don’t own it, they don’t have an emotional connection to the object in question.
4. Effort increases value: When we assemble an object ourselves or fix up our house or car with our own hands, this increases its value. However, the effort invested is usually not valued in the same way by the buyer.
In this way, we can understand that our emotional connection as owners of an object increases the value we attach to it. But obviously, in the market, these details are not considered, and this is where major disagreements between buyers and sellers arise.
Reference:
Carmon, Z. & Ariely, D. (2000) Focusing on the Forgone: How Value Can Appear so Different to Buyers and Sellers. The Journal of Consumer Research ; 27(3): 360-370.
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