Exploring the work of Thaler, Kahneman and Tversky, evaluating the endowment effect, status quo bias and loss aversion - to better understand how watch collectors' think.
#5. When it comes to wine, I drink most of it within a month or two of buying/receiving regardless of price so I’m probably not the right person to ask. Easy come easy go. Great read my Man!
At first I did the interest thing on the original outlay and planned to compare it to the 75 bucks, but then realized that didn't make sense given the money was already sunk. I often do this "what could have been" type of flawed thinking.
In contemplating your thought experiment, I think the biggest issue I have is the fear of regret. For example, putting aside all the other variables like AD relationships and the like, I know that I should sell one of my watches that have apricated in value. I'd be able to take the gain over what I paid and probably end up with something better. But even realizing that, I find it very hard to let go of anything as I know it probably means I won't be coming back to it. Right now, that fear of regret in giving up the bird in hand overrides the rational outcome of upgrading to something better. Weird, but perhaps similar to the endowment effect?
The what could have been thing is plain sunk cost fallacy right?
I think you’re right… endowment effect fits - but not perfectly. I’d say it is related to the value we associate with the AD relationships and the social currency of a particular piece, and the relative difficulty and cost of replacement (since we will not sell at Chrono24 or grey market selling price) … so it feels like a mix of all that stuff which makes the “value” to us as owners become excessively inflated.
That’s not unusual- it just needs some calibration. So for objectively rarer watches which are not easily replaceable - I think that “value” being inflated is valid. Daytonas and such? Not at all.
Another good read, providing some new perspective that is very relatable!
I do like the concept of rating the value and enjoyment on a cost per view basis because I actually get a lot of enjoyment from looking at my watches just sitting in the box quite often since I can’t possibly wear them all frequently enough.
Although I do try to rotate them equitably and am fortunate to live in an area where very few would recognize many, if any at all, of my time pieces 😉😝
#5. When it comes to wine, I drink most of it within a month or two of buying/receiving regardless of price so I’m probably not the right person to ask. Easy come easy go. Great read my Man!
Yolo, I suppose! Thanks for taking the time 👊😃
At first I did the interest thing on the original outlay and planned to compare it to the 75 bucks, but then realized that didn't make sense given the money was already sunk. I often do this "what could have been" type of flawed thinking.
In contemplating your thought experiment, I think the biggest issue I have is the fear of regret. For example, putting aside all the other variables like AD relationships and the like, I know that I should sell one of my watches that have apricated in value. I'd be able to take the gain over what I paid and probably end up with something better. But even realizing that, I find it very hard to let go of anything as I know it probably means I won't be coming back to it. Right now, that fear of regret in giving up the bird in hand overrides the rational outcome of upgrading to something better. Weird, but perhaps similar to the endowment effect?
The what could have been thing is plain sunk cost fallacy right?
I think you’re right… endowment effect fits - but not perfectly. I’d say it is related to the value we associate with the AD relationships and the social currency of a particular piece, and the relative difficulty and cost of replacement (since we will not sell at Chrono24 or grey market selling price) … so it feels like a mix of all that stuff which makes the “value” to us as owners become excessively inflated.
That’s not unusual- it just needs some calibration. So for objectively rarer watches which are not easily replaceable - I think that “value” being inflated is valid. Daytonas and such? Not at all.
Seems right on both accounts. Appreciate another thought provoking article,
🥂
Another good read, providing some new perspective that is very relatable!
I do like the concept of rating the value and enjoyment on a cost per view basis because I actually get a lot of enjoyment from looking at my watches just sitting in the box quite often since I can’t possibly wear them all frequently enough.
Although I do try to rotate them equitably and am fortunate to live in an area where very few would recognize many, if any at all, of my time pieces 😉😝
Now to go back to the podcast.....