I remarked today to someone that a PS3 is “worth more than I’d pay for it”. (Specifically, receiving a PS3 as a gift is worth more than I’d pay for it.) What I really meant to say is “worth more than the maximum I’d pay for it”. So the question is, is that true, and are there are things for which that statement is true? Or the reverse, something that’s worth less than the maximum I’d pay for it?
I think it’s true, which means that I’m irrational about PS3s. Or that the standard concept of “rationality” fails to capture some sorts of value, such as the value in terms of how I received something, not just what I received, and that there may be non-monetary forms of value. Another example that I’ve thought of is airport food: It’s probably worth the price to me, but I’m not going to pay it out of principle.
I feel like these are pretty classic cases of (economically) irrational decision-making. I don’t want to pay the airport prices since I feel like vendors are being too greedy; this is similar to the ultimatum game where people don’t accept small amounts of money because it shows that the other person is being too greedy. And received the PS3 must hook into some other suitable irrationality.
I haven’t, though, been able to think of something that’s worth less than the maximum that I’d pay for it, except for things that I buy by mistake, or things that turned out to be less valuable than I expected them to buy when I bought them. I might be missing something, but if this is true, it means that my irrationality is asymmetric: I’ll hold off on buying things that I probably should actually buy, but I (seemingly) don’t buy things that I shouldn’t buy. Perhaps it’s just that when I buy something, I’ll automatically inflate the perceived value of the item to match what I pay, even if it wouldn’t be worth that separately, and then later when it resets I interpret that as “discovering” it wasn’t worth as much as I thought, instead of “realizing”.