Consider a simple experiment.12 Half the students in a class are given a coffee mug with the insignia of their home university embossed on it. The students who do not get a mug are asked to examine their neighbors’ mugs. Then mug owners are invited to sell their mugs and nonowners are invited to buy them. They do so by answering this question: “At each of the following prices, indicate whether you would be willing to (give up your mug/buy a mug).” The results show that those with mugs demand roughly twice as much to give them up as others are willing to pay to get one.
