No one sells their flat at the price they would pay for it

Cornell, spring 1990. Daniel Kahneman, Jack Knetsch and Richard Thaler handed out 22 mugs at random in an economics class and asked each student the price at which they would sell or buy one. The mug holders: $5.25. The paper holders: $2.25.

Same mug, same day, same class. A 133 per cent margin for having held it twenty minutes.

They called it the endowment effect and published it two years later in the Journal of Political Economy. The idea is old and disagreeable: as soon as something is yours, it starts being worth more to you than to anyone else. Not in your head — in the price you set. It has been reproduced with pens, tickets, used cars and flats across five continents. In housing, the gap between what the owner asks and what a reasonable buyer would pay is around twenty per cent; that is what explains why you have spent two years not selling that second home you are never going back to sleep in. At Duke, in 2000, students who had just won a basketball tournament ticket in a lottery asked on average 2,400 dollars to sell it. Those who had not won offered 175.

The trick, if you plan to sell something of yours, is the one Thaler used on his own wine cellar: before you name a price, write yourself a cheque for what you would pay this afternoon to buy exactly that thing, with no nostalgia. Post it at that price.