The shopping news

You break it, you bought it. Fair enough. But what about you touch it, you bought it? Seems so, according to this study published in the August 2008 issue of Judgment and Decision Making:

Participants in the study were shown an inexpensive coffee mug, and were allowed to hold it either for 10 seconds or 30 seconds. They were then allowed to bid for the mug in either a closed (where bids could not be seen) or open (where they could be seen) auction. The participants were told the retail value of the mug before bidding began ($3.95 in the closed auction; $4.95 in the open auction).
The study [. . . ] found that on average, people who held the mug for longer bid more for it - $3.91 to $2.44 in the case of the open auction and $3.07 to $2.24 in the closed. In fact, people who held the mug for 30 seconds bid more than the retail price four out of seven times.

This is why car dealers are happy to let you take a brand-new car for a test drive.

The paper itself has a bit to say about the “endowment effect” which will be of considerable interest to anyone unfortunate enough to be trying to buy a house right now.

Monitor: Tyler Cowen