A new Yale neuroscience research study sheds light on just how much of an effect language can have on the value people assign to certain goods.
The research used prior knowledge about the “endowment effect” — a phenomenon in which people are willing to pay more to keep an item than they are to purchase the same item — to ask how one’s willingness to part with an item is influenced by whether they hear the word “sell” or “take.” Conducted by former lab manager at the Yale Decision Neuroscience Lab Kirk Manson and Yale professor of neurobiology Ifat Levy, the research appeared in Plos One Journal on March 30.
“Just by saying, ‘How much will you sell it for?’ [as opposed to ‘How much will you take for it?’] can change the value the sellers put on the good, or change the way they approach the entire transaction,” Manson said.
The researchers compared data collected under two hypothetical conditions that they set up for research participants: the “sell” condition and the “take” condition. Participants in both cases were given the same set of pens. In the sell condition, they were asked, “How much would you sell the pens for?” In the take condition, the instructions asked participants, “How much would you take for the pens?” Subject participants gave higher prices under the sell condition.
Manson said that the word “sell” might put into the participants’ minds a motivation to make money.
“Calling someone a seller is activating [in them] a motivation that is associated with the characteristics of a seller, such as selling high and buying low,” Manson said.
He added that although he cannot infer from the findings the specific motivations at play, the findings are consistent with other theories, which suggest that different roles in transactions make individuals focus on different aspects of those transactions and behave differently.
Levy said the findings may influence how researchers write instructions or structure experiments for their behavioral studies.
“Subtle manipulation in experimental design may lead to very different outcomes,” she added.
Language affects value assigned to objects Steve Chang, Yale professor of psychology and neurobiology, said the findings imply that circuits in the brain associated with how people attach value to objects and experiences are influenced by how others phrase value-related information.
Manson said the finding is important for informal market transactions, such as personal exchange of property. These transactions, unlike daily purchases at convenience stores or shopping malls where goods have price tags and their prices are non-negotiable, often include bargaining between sellers and buyers.
More broadly, Manson said, the finding has implications for the language companies use in acquisition contracts.
“I am not an expert in management. The bigger picture of social implications on marketing and management are somewhat out of my range. But I can see these as remarkable points being influential,” he added.
Manson said the research opens doors for research into different language manipulation. The researchers used “take for” because they viewed it as neutral, but it is possible, Manson said, that it is not. If the latter is true, the difference in assigned prices may then be the result not of the word “sell” raising the ascribed price, but rather of the phrase “take for” pulling it down, he added.
Levy said future directions for research include examining how not only language, but also any kind of unexpectedly influential manipulation might exert impact on decision-making.
Chang added that it would be interesting to use fMRI to observe how the brain circuits that assign value to objects and experiences are differentially activated in the “sell” and “take” conditions.
The term “endowment effect” was first coined by the economist Richard Thaler in 1980.