Narratives and Valuations

37 Pages Posted: 10 Sep 2021 Last revised: 27 Oct 2021

See all articles by Dor Morag

Dor Morag

University of Pittsburgh - PhD candidate, Department of Economics

George Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences

Date Written: September 8, 2021

Abstract

While the significance of narrative thinking has become increasingly recognized by economists, very little empirical research has documented its consequences for economically significant outcomes. We address this gap in one important domain: valuations. In two online experiments, participants either told the story of an item they owned (mug in study 1, hat in 2) or listed its characteristics and were then offered the opportunity to sell it via an incentive-compatible procedure. The narrative treatment led to substantially higher selling prices (33% increase on average) and unwillingness to sell rates (78% increase). The impact of different narrative types was also explored.

Keywords: Decision-Making, Narratives, Stories, Valuations, Willingness to Accept, Item Attachment

JEL Classification: D91, C93

Suggested Citation

Morag, Dor and Loewenstein, George F., Narratives and Valuations (September 8, 2021). Available at SSRN: https://ssrn.com/abstract=3919471 or http://dx.doi.org/10.2139/ssrn.3919471

Dor Morag (Contact Author)

University of Pittsburgh - PhD candidate, Department of Economics

United States

George F. Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences ( email )

Pittsburgh, PA 15213-3890
United States
412-268-8787 (Phone)
412-268-6938 (Fax)

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