How Much Would You Pay for a Second Vote? How the Endowment Effect Alters Our Concept of Value

Election season inevitably raises questions about how much our individual votes are worth. As I mentioned in a previous blog, there are circumstances where you could strategically increase the value of your primary vote. Although you don’t get to choose where you cast your primary vote, the number of delegates in your state has little connection with the number of voters. For instance, fewer than 3,000 votes in the D.C. Republican caucus determined 19 delegates. (Approximately 150 votes per delegate.) In the Texas Republican primary, 2.7 million votes represented 155 delegates. (Over 17,000 votes per delegate.)

If you and another person voted in the same election (either the same primary or in the same state for the general election), wouldn’t you assume your vote and the other person’s vote were identical and had the same value? Interestingly, for reasons having to do with behavior rather than voting rules, identical votes don’t always have identical values.

The other day, I was talking with a friend about the upcoming Pennsylvania primary. He asked, “If you could have a legal, second vote in the primary, how much would you pay for it?” Just as I started my answer (which was going to be $100), he then asked, “If you could legally sell your one vote, how much would you sell it for?”

I answered, “At least the amount that it would cost to sustainably lift a village in Africa from poverty.”

How could that be right? My answer was completely irrational and I knew it as I said it. I don’t know how much it costs to lift a village from poverty but I’m sure it’s a lot more than $100. A rational actor would buy the second vote for the same amount they would sell the first vote for since in a democracy each vote has equal value. As well, by definition, how much you would pay for an item should determine its worth to you so you should sell and buy for the same price.

So why would I put such drastically different values on the same thing, an extra vote I could buy or the sale of my first vote? If you try asking someone the same hypothetical, you’ll probably hear the same imbalance between what they would buy the second vote for versus sell the first vote for. I asked several people and every time, their price to sell their vote was much higher than their price to buy an identical, second vote.

This inequity is a result of the endowment effect. A great article on BigThink.com, “Rethinking the Endowment Effect: How Ownership Affects Our Valuations, describes the endowment effect as “our irrational tendency to overvalue something just because we own it.”

I’m using voting here because it’s such a good example at the moment. Whether there should be a market for buying and selling votes is a separate issue I’m not addressing. But if there was such a hypothetical market, shouldn’t every vote have the same value?

The original thinking was that the endowment effect was part of our general tendency toward loss aversion, how the negative feelings from a loss are greater than the positive feelings from an equivalent gain. But that doesn’t explain the entire endowment effect. With voting, maybe there is the civic tug that we’re disenfranchising ourselves if we sell our vote or maybe it’s just that we don’t value the second vote much because we already have a vote.

It turns out civics likely has less to do with the imbalance than findings that show that we put a much smaller value on a duplicate of something we own. We don’t like being deprived of things we “own” only if they are unique, whether it is our right to vote or a coffee mug. In two sets of experiments on endowment effect and loss aversion with coffee mugs, Carey Morewedge, Lisa Shu, Daniel Gilbert, and Timothy Wilson found that the endowment effect disappeared if sellers setting the price were selling a duplicate item. This would explain why I valued the second vote I might purchase so much less than the first vote I might sell since the second vote is a duplicate.

Even though I am well-versed in the endowment effect and this research, I still responded irrationally when asked how I valued my vote. That shows how robust the endowment effect is.

Originally published at annieduke.com.