FanPost

We overvalue our players by a factor of 14

In the August New Yorker magazine, in an article called "Status-quo Anxiety," James Surowieki writes about why we balk at changing healthcare.

WAIT!  COME BACK!  This is about the Blazers, really. 

 

Because my brain is 80% BIRs (basketball information receptors) I read the whole New Yorker article as an explanation as to why it's nearly impossible for a Blazer fan to want to trade Bayless. It also explains why I occasionally see BE posts that suggest trading a few of our bench players for Chris Paul.  And furthermore, it partially explains why I personally don't like trades much.

 

Surowiecki says something called the "endowment effect" makes people overvalue an asset simply because they own it.  

 

Here is one of the studies he mentions. Don't worry it's coincidentally basketball related:

 

The academics Ziv Carmon and Dan Ariely... posing as ticket scalpers... phoned people who had entered a raffle  to win tickets to a Duke basketball game. People who hadn't won tickets were willing to pay, on average, a hundred and seventy dollars to get into the game. But those who had won tickets wanted twenty-four hundred dollars to part with them. In other words, those who had, by pure luck, won the tickets thought the ducats were were fourteen times as valuable as those who hadn't.

 

When you're talking about human beings rather than tickets, obviously there are other factors, but as a general rule I think I am influenced by the endowment effect.

 

I should also mention Dan Ariely, who performed the study,  is really entertaining. Listen to him talk about how truly irrational we all are.

http://www.ted.com/talks/dan_ariely_asks_are_we_in_control_of_our_own_decisions.html

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