Economy Kushay's Matter Bank

[AK] Manifestation of Behavioural Economics – Reclining Airplane Seats

This note will briefly discuss an interesting example of how psychology influences our economic choice. Source:

Research shows that if you own something (even if you don’t work hard to obtain it), you value it much higher compared to when you don’t own that thing.

A case study is on passengers of airplanes. Some airplanes have reclining seats, which if reclined will take away the space of the passenger behind it. The research observes behavior of people on two scenarios:

1. When passengers have an automatic right to recline when they purchase the plane ticket

2. When passengers “have” the space in front of their seats (which means that the person in front can’t recline unless they pay additional fee).

The result is that on the 1st scenario, people who have the right to recline are only willing to give it up for 40 USD, while on the 2nd scenario they are only willing to pay 15 USD to “purchase the right to recline” from the passenger behind them.

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