Bad riddance or good rubbish? Ownership and not loss aversion causes the endowment effect

People typically demand more to relinquish the goods they own than they would be willing to pay to acquire those goods if they did not already own them (the endowment effect). The standard economic explanation of this phenomenon is that people expect the pain of relinquishing a good to be greater than the pleasure of acquiring it (the loss aversion account). The standard psychological explanation is that people are reluctant to relinquish the goods they own simply because they associate those goods with themselves and not because they expect relinquishing them to be especially painful (the ownership account). Because sellers are usually owners, loss aversion and ownership have been confounded in previous studies of the endowment effect. In two experiments that deconfounded them, ownership produced an endowment effect but loss aversion did not. In Experiment 1, buyers were willing to pay just as much for a coffee mug as sellers demanded if the buyers already happened to own an identical mug. In Experiment 2, buyers’ brokers and sellers’ brokers agreed on the price of a mug, but both brokers traded at higher prices when they happened to own mugs that were identical to the ones they were trading. In short, the endowment effect disappeared when buyers were owners and when sellers were not, suggesting that ownership and not loss aversion causes the endowment effect in the standard experimental paradigm.     

Making Decisions in Foreign Languages: Weaker Senses of Ownership Attenuate the Endowment Effect

Although the number of bilingual consumers is expanding, research on the impact of language on consumer decision making is scarce. The current research examines the endowment effect, which is a fundamental consumer decision‐making regularity, under native versus foreign language processing. I show that the endowment effect, which refers to higher valuation of a given product by sellers than buyers, is attenuated when sellers and buyers process information in a foreign language due to a decrease in sellers’ valuation of the product. I further document empirical evidence for the underlying mechanism of this finding. Thinking in a foreign language diminishes the impact of affective reactions on sellers’ judgment, which results in lowered sense of psychological ownership. This lowered sense of psychological ownership significantly decreases sellers’ valuation to a level comparable to the valuation of buyers. The implications of these results for theory and practice, and avenues for future research are discussed.     

How beliefs influence the relative magnitude of pleasure and pain

Loss aversion is an economic assumption about utility—people value giving up a good more than they value getting it. It also has hedonic meaning—the pain of a loss is greater in magnitude than the pleasure of a comparable gain. But value and pleasure are not necessarily identical. We test the hedonic interpretation of loss aversion in experimental markets. With hedonic forecasts, sellers imagine the pain of losing their endowment, and buyers imagine the pleasure of being endowed. With hedonic experiences, sellers rate the pleasure of having the endowment, and buyers rate the pain of being without it. Contrary to loss aversion, predicted pleasure is greater in magnitude than predicted pain, and experienced pleasure surpasses experienced pain. We show that the relative magnitude of pleasure and pain depends on beliefs about the likelihood of outcomes, as well as utilities. Surprise makes gains more pleasurable and losses more painful. With surprising gains and expected losses, pleasure can surpass pain. But when gains and losses are equally likely (or losses are surprising and gains are expected), the opposite pattern can occur. Finally, within‐group and between‐group prices are significantly correlated with hedonic experiences. Sellers who feel better with their endowments assign higher selling prices, and buyers who feel worse about the absence of endowment assign higher buying prices. Despite the fact that hedonic experiences deviate from loss aversion, these emotions predict the endowment effect. Copyright © 2009 John Wiley & Sons, Ltd.     

Constructing preference from experience: the endowment effect reflected in external information search

People often attach a higher value to an object when they own it (i.e., as seller) compared with when they do not own it (i.e., as buyer)--a phenomenon known as the endowment effect. According to recent cognitive process accounts of the endowment effect, the effect is due to differences between sellers and buyers in information search. Whereas previous investigations have focused on search order and internal search processes (i.e., in memory), we used a sampling paradigm to examine differences in search termination in external search. We asked participants to indicate selling and buying prices for monetary lotteries in a within-subject design. In an experience condition, participants had to learn about the possible outcomes and probabilities of the lotteries by experiential sampling. As hypothesized, sellers tended to terminate search after sampling high outcomes, whereas buyers tended to terminate search after sampling low outcomes. These differences in stopping behavior translated into samples of the lotteries that were differentially distorted for sellers and buyers; the amount of the distortion was predictive of the resulting size of the endowment effect. In addition, for sellers search was more extended when high outcomes were rare compared with when low outcomes were rare. Our results add to the increasing evidence that the endowment effect is due, in part, to differences in predecisional information search.     

引入中立方参照：对禀赋效应的再探讨

在以往禀赋效应研究的基础上, 本研究引入中立方估价值作为参照, 在时间维度上探讨了禀赋效应的变化趋势, 并尝试延伸禀赋效应的定义。研究发现, 随着卖方拥有物品的时间延长, 买卖双方的估价呈下降趋势, 卖方的估价总是显著高于买方, 但买卖双方的估价之差不随卖方拥有物品的时间延长发生变化; 以中立方的估价为参照, 在较短的时间内卖方的估价倾向于理性, 在较长的时间内买方的估价倾向于理性; 卖方的估价在时间水平上相对于中立价格呈递增性, 而买方的估价相对于中立价格呈递减性。引入中立方再探讨禀赋效应并没有否定它的存在, 而且能够更好地解释生活中的非理性行为。     

禀赋效应对产品更换决策的影响

以禀赋效应理论为研究基础, 通过两个情景实验对产品更换过程中买卖双方的决策心理进行了研究。实验1表明, 在以旧换新活动中新产品的买方对旧产品的价格有高估的倾向, 对新产品的价格有低估的倾向; 相反, 新产品的卖方对旧产品的价格有低估的倾向, 而对于新产品的价格有高估的倾向, 这说明产品更换决策中存在着双重的禀赋效应。实验2表明, 新产品的买方对旧产品的属性评价显著高于新产品的卖方, 对新产品的属性评价显著低于新产品的卖方, 说明属性评价也存在禀赋效应的特征。双重禀赋效应的存在从消费者行为的角度解释了为什么消费者会出现创新抵制行为。     

The Question of Higher Education for the Blind

Building on the theory of reasoned action (I. Ajzen & M. Fishbein, 1973, 1980; M. Fishbein & I. Ajzen, 1975) and expectancy theory, the authors examined the mediating role of alcohol expectancies in adolescent drinking behaviors by testing whether alcohol expectancy outcomes and valuations (the extent to which these outcomes are perceived as good or bad) mediate the association between peer influences and lifetime alcohol use. Early adolescents (N = 904) from 2 public middle schools in western Michigan completed a battery of questionnaires. Overall, results showed that alcohol expectancies and valuations partially mediated the relations between peer influences (peer use and peer approval) and lifetime alcohol use. The findings suggest that associating with peers who are perceived as using alcohol and approving of drinking may influence adolescents’ alcohol expectancies. The authors briefly discuss future research directions and implications for prevention.     

For whom is parting with possessions more painful? Cultural differences in the endowment effect

The endowment effect--the tendency for owners (potential sellers) to value objects more than potential buyers do--is among the most widely studied judgment and decision-making phenomena. However, the current research is the first to explore whether the effect varies across cultures. Given previously demonstrated cultural differences in self-construals and self-enhancement, we predicted a smaller endowment effect for East Asians compared with Westerners. Two studies involving buyers and sellers of a coffee mug (Study 1a) and a box of chocolates (Study 1b) supported this prediction. Study 2 conceptually replicated this cultural difference by experimentally manipulating independent and interdependent self-construals. Finally, Study 3 provided evidence for an underlying self-enhancement mechanism: Cultural differences emerged when self-object associations were made salient, but disappeared when self-object associations were minimized. Thus, the endowment effect may be influenced by the degree to which independence and self-enhancement (vs. interdependence and self-criticism) are culturally valued or normative.     

True Context‐dependent Preferences? The Causes of Market‐dependent Valuations

A central assumption of neoclassical economics is that reservation prices for familiar products express people's true preferences for these products; that is, they represent the total benefit that a good confers to the consumers and are, thus, independent of actual prices in the market. Nevertheless, a vast amount of research has shown that valuations can be sensitive to other salient prices, particularly when individuals are explicitly anchored on them. In this paper, the authors extend previous research on single‐price anchoring and study the sensitivity of valuations to the distribution of prices found for a product in the market. In addition, they examine its possible causes. They find that market‐dependent valuations cannot be fully explained by rational inferences consumers draw about a product's value and are unlikely to be fully explained by true market‐dependent preferences. Rather, the market dependence of valuations likely reflects consumers' focus on something other than the total benefit that the product confers to them. Furthermore, this paper shows that market‐dependent valuations persist when – as in many real‐life settings – individuals make repeated purchase decisions over time and infer the distribution of the product's prices from their market experience. Finally, the authors consider the implications of their findings for marketers and consumers. Copyright © 2013 John Wiley & Sons, Ltd.     

Beyond mere ownership: transaction demand as a moderator of the endowment effect

Transaction demand refers to the motivation to complete a transaction. As transaction demand increases, owners should sell at lower prices and buyers should buy at higher ones. It was predicted that the endowment effect—the tendency for minimum selling price to exceed maximum buying price for a particular commodity—should be minimized when buyers and sellers have high transaction demand. The results of two experiments supported this hypothesis: In Experiment 1, the endowment effect was observed when participants imagined another individual wanting to buy from or sell to them, but not when they imagined wanting to buy from or sell to another individual. In Experiment 2, a reversal of the endowment effect was observed when transaction demand was high for both prospective buyers and sellers. The findings highlight the importance of motivational factors in addition to other factors (e.g., loss aversion, reference dependence) in determining behavior.     

The Seller's Sense: Buying–Selling Perspective Affects the Sensitivity to Expected Value Differences

Previous work comparing pricing decisions by buyers and sellers has primarily focused on the endowment effect, the phenomenon that selling prices exceed buying prices. Here, we examine whether pricing decisions by buyers and sellers also vary in sensitivity to differences between objects' expected values (EVs). Both a loss‐aversion account (which posits that losses are weighted more heavily than gains) and a loss‐attention account (which posits increased attention to a task when it involves possible losses) predict that pricing decisions by sellers should exhibit higher sensitivity. The latter, however, additionally predicts that this pattern should only emerge under certain conditions. In studies 1 and 2, we reanalyzed two published datasets in which participants priced monetary lotteries as sellers or buyers. It emerged that sellers showed greater EV sensitivity (defined as the rank correlation between the set price for each lottery and its EV) except in a condition with an extended deliberation time of 15 seconds. In study 3, the buyer–seller difference in EV sensitivity was replicated even when the pricing task was presented repeatedly, while in study 4, it was eliminated when buying and selling trials were randomly mixed. The reduction of the “seller's sense” in long deliberation and mixed trials settings supports an attentional resource‐based account of the differences between sellers and buyers in their EV sensitivity. Copyright © 2016 John Wiley & Sons, Ltd.     

Egocentric empathy gaps between owners and buyers: misperceptions of the endowment effect

In 5 studies, the authors examined people's perceptions of the endowment effect, or the tendency to value an object more once one owns it. In the 1st 2 studies, the authors documented egocentric empathy gaps between owners and buyers regarding the endowment effect: Both owners and buyers overestimated the similarity between their own valuation of a commodity and the valuation of people in the other role. The next 2 studies showed that these empathy gaps may lead to reduced earnings in a market setting. The final study showed that egocentric empathy gaps stem partly from people's misprediction of what their own valuation would be if they were in the other role.     

The Role of Anticipated Emotions in the Endowment Effect

This research explored the role of anticipated negative feelings in the observed disparity between buying and selling prices for the same endowed object. We assumed that anticipated negative reactions to losses deter people from trading an endowed object and therefore psychological variables that attenuate the emotional response to negative events should further reduce the price disparity between buyers and sellers. In 3 studies, we tested whether factors that either decrease concern about negative feelings (e.g., positive mood, framing of the transaction as involving no action) or increase the anticipated negative reaction to failure to act (e.g., priming errors of omission) further eliminate the disparity between buying and selling prices. These studies provide a novel conceptualization of the endowment bias and, more generally, illustrate the role of anticipated negative feelings in decision making.     

Changes in women's mate preferences across the ovulatory cycle

Previous research has shown that women's mate preferences change across the ovulatory cycle in a number of ways. The leading explanation for these changes--the good genes hypothesis--predicts that women should prefer presumed markers of genetic benefits ("good genes") most strongly when they are fertile and evaluating men as possible short-term mates. Research testing this hypothesis has almost exclusively examined preferences for purported markers of good genes. Little is known about how preferences for men who display traits valued in long-term, investing mates (e.g., warmth and faithfulness) change across the cycle. The authors had women at different points in their ovulatory cycle rate videotapes of men in terms of how attractive they found each man as a short-term and long-term mate. The authors then examined how women's preferences for traits typically valued in long-term and/or short-term mates varied according to women's fertility status. The results supported the good genes hypothesis. Implications of these findings for models of human mating are discussed.     

Time pressure and the endowment effect

This research examines how time pressure influences bidding behavior in experiment auctions. The studies reported herein investigate how time pressure systematically impacts individual trading of an endowed object by looking at the disparity between buying and selling prices for that object. Study 1 tests whether the effect of time pressure eliminates the disparity between selling and buying prices. In Study 2, transaction demand is employed to see whether sellers and buyers are more sensitive to changes in the item (amount of work). In Study 3, sellers and buyers access information of differing valence in the task. In Study 4, the framing of the reference price is manipulated to moderate the endowment effect. These studies indicate that under time pressure, endowment bias is reduced and, more generally, elucidate the role of trading behavior in decision making.     

Dyadic processes of disclosure and reciprocity in bargaining with communication

We offer a study revealing the mechanisms through which communication helps actual bargaining behavior outperform economic predictions. The possibility of individually strategic behavior in the presence of private information leads to game‐theoretic predictions of less than full efficiency. We present a one‐stage, simultaneous offers bargaining game in which buyers and sellers have independent, privately held valuations for the item being sold (i.e. a bilateral auction with two‐sided private information). In three communication treatments, parties are: (a) allowed face‐to‐face communication prior to submitting offers; (b) allowed written communication prior to submitting offers; or (c) allowed no‐communication prior to submitting offers. When parties are allowed pre‐play communication, we find nearly full efficiency (98%). We examine two systematically predictable aspects of dyadic interaction—disclosure and reciprocity—to explain how negotiators achieve this efficiency. Copyright © 2002 John Wiley & Sons, Ltd.     

Unpacking buyer-seller differences in valuation from experience: A cognitive modeling approach

People often indicate a higher price for an object when they own it (i.e., as sellers) than when they do not (i.e., as buyers)—a phenomenon known as the endowment effect. We develop a cognitive modeling approach to formalize, disentangle, and compare alternative psychological accounts (e.g., loss aversion, loss attention, strategic misrepresentation) of such buyer-seller differences in pricing decisions of monetary lotteries. To also be able to test possible buyer-seller differences in memory and learning, we study pricing decisions from experience, obtained with the sampling paradigm, where people learn about a lottery’s payoff distribution from sequential sampling. We first formalize different accounts as models within three computational frameworks (reinforcement learning, instance-based learning theory, and cumulative prospect theory), and then fit the models to empirical selling and buying prices. In Study 1 (a reanalysis of published data with hypothetical decisions), models assuming buyer-seller differences in response bias (implementing a strategic-misrepresentation account) performed best; models assuming buyer-seller differences in choice sensitivity or memory (implementing a loss-attention account) generally fared worst. In a new experiment involving incentivized decisions (Study 2), models assuming buyer-seller differences in both outcome sensitivity (as proposed by a loss-aversion account) and response bias performed best. In both Study 1 and 2, the models implemented in cumulative prospect theory performed best. Model recovery studies validated our cognitive modeling approach, showing that the models can be distinguished rather well. In summary, our analysis supports a loss-aversion account of the endowment effect, but also reveals a substantial contribution of simple response bias.     

Rawls’s Principle of Justice as Fairness and Its Application to the Issue of Same-Sex Marriage

Abstract

This essay applies the principle of justice as fairness to the issue of same-sex marriage. I will outline Rawls’s theory of justice, including the original position and the veil of ignorance as the means by which choosers craft a just state. In considering whether same-sex marriage should be permissible, I argue that a just society, formulated in the Rawlsian context of justice as fairness, should allow them. I assert that gays and lesbians do count as equal citizens because they possess the minimum requirements of the capacity for a sense of justice, a conception of the good, and the ability to be cooperating members of society. Furthermore, within the original position gays and lesbians will be represented because choosers do not know their sexual orientation because it is one of the individual characteristics that are withheld behind the veil. Since the choosers do not know their sexual orientation, they will be unable to use that information in their construction of what counts as a just state comprised of free and equal citizens. Because the family, and the institution of marriage as a primary manifestation of the family, is one of the major social institutions within the basic structure, limitations must be carefully scrutinized.     

齐鲁人与两汉地方治安

各级地方官作为维护治安职能的主要承担者,是关系地方治安好坏与否的关键因素。两汉社会的治安问题主要集中于三个方面：一是以豪强大姓为主、对社会治安严重破坏的地方恶势力;二是遭遇天灾人祸的诸多灾民、流民;三是官逼民反,以农民为代表的社会下层反抗势力。针对这些不同情况、不同性质的问题,许多齐鲁籍官吏采取了不同的措施和方法,并且留下大量施政范例,在社会治安方面为后人提供了有益的借鉴。