When you are outbid on an auction site you get ticked off. You jump on your phone and bid again – claiming your rightful place at the top of the heap as the #1 bidder.
Then someone bids above you and once again, almost on autopilot, you bid again. You can’t believe someone is trying to take your turn of the century, artisanal, Frank Lloyd Wright-inspired, hand-blown from antique schoolhouse window glass, salt and pepper shakers, away from you. How dare they!
Your brain already thinks you own them because you were the #1 bidder. But you don’t. Why would you get so bent out of shape about someone outbidding you? They aren’t yours.
“Sort of” Ownership
One of my favorite biases is the “pseudo endowment” effect. It is based on the “endowment effect” where we tend to value things we own more highly than things we don’t own. By quite a bit. And this applies in situations, like auctions, where we “sort of” own something (at least for minutes, or even seconds, until outbid.) Hence the term “pseudo”.
That we act on these types of unconscious biases is one of the main reasons getting your audience to set tangible goals in an incentive is so important. Setting a tangible goal establishes an endowment. Your audience will now start thinking they already own the award – and their performance is the only thing stopping them from taking it home.
Because we value things we already own (and pseudo-own) we are more likely to perform at a higher level to ensure we get the award. Suggesting that you could earn dollars or points to get “an award” doesn’t have the same effect. That isn’t as tangible.
Get folks to set goals.
That is the #1 thing you can do to make our program work better.