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.     

源于“反常”终于“常理”的禀赋效应

如果忽略收入影响和交易成本, 愿意为一样物品支付的价格应等于愿意出售的价格。而塞勒教授却发现, 现实生活中有一些“反常”现象, 个体会对自己所拥有的物品赋予更高的价值, 造成“愿意支付价格”和“愿意出售价格”的不一致。塞勒利用预期理论中的损失厌恶对这些反常现象进行解释, 并将该现象称为禀赋效应(endowment effect)。此后, 众多研究者从不同角度对该效应进行了探索和论证。文章详细梳理了禀赋效应的多种解释机制, 包括损失厌恶、心理所有权理论、偏差的认知过程以及进化的观点等, 论证了禀赋效应符合“常理”的原因, 同时也探讨了禀赋效应在商业销售策略和政府拆迁政策等方面的应用前景。     

禀赋效应的心理机制及其影响因素

禀赋效应是指个体在拥有某物品时对该物品的估价高于没有拥有该物品时的估价的现象。这一现象在行为经济学中普遍存在。禀赋效应的研究范式包括经典研究范式与物物交换范式。禀赋效应的心理机制主要包括损失规避与查询理论。禀赋效应的影响因素主要包括认知角度、动机、情绪、交易物品的特征、研究设计的选择等。未来的研究需要从禀赋效应的适用条件、产生根源、研究范式的改进等方面进一步探讨。     

Bringing (Contingent) Loss Aversion Down to Earth — A Comment on Gal & Rucker's Rejection of “Losses Loom Larger Than Gains”

Although we disagree with some of Gal and Rucker's (2018 – this issue) specific evidence and with their overstated conclusion regarding loss aversion, their overarching message makes a worthwhile contribution. In particular, loss aversion is less robust and universal than has been assumed while its most prominent empirical support — the endowment effect and the status quo bias — is susceptible to multiple alternative explanations. Instead of accepting loss aversion as true unless proven otherwise, we should treat it like other decision properties and psychological accounts that are contingent on various moderators and call for an analysis of psychological mechanisms. In this commentary, we suggest that gatekeepers, such as reviewers, tend to favor loss aversion and other widely accepted tendencies, while demanding a much higher support‐threshold for alternative or newer accounts. Although building on prior theories and concepts is of course important, the bias in favor of incumbent assumptions can impede scientific progress, bar new ideas from the literature, and reinforce well‐established but contingent notions that may apply under some conditions but not others.     

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.     

Probe similarity and recognition of set membership: A parallel-processing serial-feature-matching model

A model for memory scanning is proposed in which the encoded representation of a probe is compared in parallel with encoded representations of each item in the positive set. The within item matches are serial feature by feature comparisons that terminate when either a positive or negative criterion is reached. This model is shown to predict the results of a probe similarity experiment. The serial location of a similarity within an item affects negative reaction times, but the number of items in the positive set to which the probe is similar has no main effect. The model is also shown to yield predictions consonant with existing data on the relation between reaction times and set size and speed-accuracy trade offs.     

Mementos and the endowment effect

This research provides evidence for a new moderator of the endowment effect: having a memento of the endowed object. Three studies adapting classic endowment effect paradigms and using a variety of endowment objects and mementos demonstrate that having a memento of an endowment increases willingness to trade the endowment and decreases selling prices for the endowment. We provide evidence that mementos attenuate the endowment effect regardless of whether the memento is a separate small gain when facing the loss of the endowment or a small part of the original endowment that is kept. Examining mementos in context of the endowment effect not only provides insight into the psychology underlying the reluctance to part with one's endowment but also other consumer disposition behaviors.     

The relationship between endowment and ownership effects in memory across cultures

An object one owns is typically more highly valued than an equivalent object owned by another person. This endowment effect has been attributed to the aversion of loss of one’s possessions (through selling), or the added value of an item due to self-association (through owning). To date, investigation of these mechanisms has been hampered by the between-subjects methodology traditionally employed to measure endowment. Over two experiments, we report a novel within-subjects method for measuring an endowment bias. In these studies, Western participants showed enhanced valuation of owned items, whereas East-Asian participants did not. This endowment bias also correlated with the ownership effect in memory (a measure of self-referential processing) in Western, but not East-Asian participants. Our results suggest that the endowment effect is partly predicated on the same factors that influence the ownership effect and that this commonality is likely linked to conceptions of ownership specifically, and self-concept more generally.     

Interference between maintenance and processing in working memory: the effect of item-distractor similarity in complex span

Four experiments examined the effect of phonological similarity between items and distractors on complex span performance. Item-distractor similarity benefited serial recall when distractors followed the items they were similar to, but not when distractors preceded the items they were similar to. These findings are predicted by C-SOB (contextual serial order in a box), a computational model of complex span. The model assumes that distractors are involuntarily encoded into memory, being associated to the preceding item's list position. Distractors interfere with items by superposition of distributed representations that are associated to the same position. Superposition distorts item memory; this distortion is less severe when the distractor is similar to the item. Further support for the assumption that distractors are encoded at the position of the preceding item comes from the finding that intrusions of distractors at recall tended to come from the position of the target item. In addition, intruding distractors tend to replace items to which they are similar, showing that lack of distinctiveness also contributes to interference.     

A CONCEPTUAL AND EMPIRICAL REEXAMINATION OF THE MEASUREMENT OF THE SOCIAL DESIRABILITY OF ITEMS: IMPLICATIONS FOR DETECTING DESIRABLE RESPONSE STYLE AND SCALE DEVELOPMENT

This paper calls into question traditional methods of measuring the social desirability of items and their use in scale construction. First, we make explicit that the proper focus for desirability studies of items and traits are the rated desirabilities of the alternative item responses indicating different trait levels. Second, the results from our first study show that the relation between degree of endorsement of an item and its judged desirability level is often nonlinear and varies across items such that no general model of item desirability can be adopted that will accurately represent the relations across all items, traits, and trait levels. In addition, the nature of these relationships can vary depending on whether desirability is considered in a work or general context. Third, results from a second study indicate specifically that people when instructed to self-present in a maximally desirable manner will choose for some attributes a moderate level of endorsement (e.g., "agree") rather than a more extreme response option (e.g., "strongly agree"). Subjects offer several different reasons for viewing the less extreme response options, which yield more moderate trait level scores, as more desirable. These reasons are linked to perceptions of the more extreme response option as being associated with negative behaviors and concerns about how others will view a more extreme response to the item. Both studies indicate that desirable responding to personality items is more complex than previously believed.     

不同空间构型下邻近性对视觉工作记忆中相似性效应的影响

相似性对视觉工作记忆表征的促进被称为相似性效应。以相似项目间的距离和是否插入其他项目改变邻近性,并操纵记忆项空间构型有序性,探讨邻近性对相似性效应的影响。结果发现,不同空间构型和邻近性条件下相似项目的记忆正确率高于非相似项目;在空间构型有序下,相似项目距离远时,插入其他项目时的相似性效应值低于不插入,而空间构型无序下未发现显著差异。这表明相似性促进视觉工作记忆表征,空间构型在邻近性对相似性效应的影响中起重要作用。     

Comparing Short-term Memory and Memory for Rapidly Presented Visual Stimuli

What similarities and differences are there between memory for short lists shown at one item per second and memory for such lists after rapid serial visual presentation (RSVP) at much higher rates—eight items per second? This paper reports that, when pictures are shown at eight per second or one per second, phonological similarity of the picture names reduces recall at the one item per second rate, but not at the eight item per second rate. In contrast, when subjects are shown the written names of the pictures, phonological similarity reduces recall at both rates. It is concluded that phonological coding does not occur for picture lists shown at high rates. The mechanisms underlying memory for pictures and words shown at RSVP and short-term memory rates are considered.     

Effects of relation similarity on part-whole decisions

Subjects were presented with word pairs (e.g., bed-mattress) and timed as they decided whether one word named part of the item named by the other word. Yes responses were facilitated, and no responses were impeded, by relation similarity (i.e., the similarity of the relation between the two stimulus items to the part-whole relation). Item similarity, the similarity of the two stimulus items to each other, had no effect. The results support the view that similarity effects in semantic decision tasks are due to the comparison of elements of the relation between the two stimulus words against relation elements that serve as criteria for the target relation that the subject has been asked to identify.     

Exploration of likely engagement with Monetary Contingency Contracts for weight loss: a questionnaire study

Monetary Contingency Contracts (MCCs) are schemes that ask individuals to pledge money that is returned contingent on behaviour change. In relation to weight loss, this study explored likely levels of engagement with MCCs, how much individuals would be willing to pay into an MCC, and how these amounts vary under different contract conditions. Fifty-six individuals with BMI above 25 who were motivated to lose weight were recruited. The majority of participants (87.5%) indicated that they would be willing to engage with weight loss MCCs, but showed more reluctance to subscribe to pair-based MCCs which offered; (a) refunds contingent on the weight loss of a weight loss partner, and (b) ‘all or nothing refunds’ in which no reward is given for any weight loss below the target weight loss goal. This study provides preliminary evidence that individuals motivated to lose weight may be willing to engage with weight loss MCCs. Further research is needed to explore reasons for reluctance to subscribe to MCCs with certain conditions, to inform the design of future experimental studies testing the efficacy of MCCs as part of an intervention for weight loss.     

The influence of involvement on the endowment effect: The moveable value function

The endowment effect is based on the loss aversion built into Prospect Theory's asymmetric value function. This paper posits that the level of consumer involvement with a decision is a moderator of the endowment effect. It is proposed that high involvement increases the slope differential between the loss and gain regions of the value function, enhancing loss aversion. The research further posits that higher involvement is accompanied by higher arousal and cognitive processing which produces stronger negativity in thoughts. The argument for these effects is discussed in the context of evolutionary theory. We conclude that consumers are more loss averse in high versus low involvement conditions.     

The ability to process emotional information predicts loss aversion

On the basis of previous research it was hypothesized that alexithymia is associated with a higher tolerance for losses. This hypothesis is extended to explore whether the putative link between loss aversion and alexithymia remains once traits associated with risk taking (sensation seeking) and broad based personality traits (the Big 5) are controlled. Participants (N = 260) completed indices of alexithymia, sensation seeking and the Big 5 and both a riskless (endowment effect) and risky (lottery task) measure of loss aversion. It was found that the higher the alexithymia score the lower the loss aversion for both riskless and risky decisions even when sex, sensation seeking and the Big 5 are taken into account. The implications for this finding are discussed in the light of a neurological explanation of the relationship between alexithymia and loss aversion.     

The role of potential loss in the influence of affect on risk-taking behavior

In three experiments the influence of positive affect on risk-taking behavior was examined. In Experiment 1 subjects who received a free gift of candy, compared to those in a control group, were willing to pay increasingly more for lottery tickets as the prize rose from $10 to $90 and as the probability of winning rose from .10 to .90. In Experiment 2 subjects who received a free gift of candy, compared to those in a control group, were willing to pay more to buy insurance against loss, and were particularly more likely to do so when the potential loss was large. A third study, which found that subjects who received a free gift of candy were not willing to pay more for an item than were control subjects, led us to conclude that the results of the first two experiments are not best interpreted as merely due to a general increase in the willingness to spend as a consequence of having received a gift. Instead it was concluded that positive feelings can foster both risk-prone behavior (Experiment 1) and risk-averse behavior (Experiment 2). When a positive-affect subject faces a risk situation in which the potential loss is emphasized, the subject demonstrates risk aversion; when the potential loss is minimized, then risk proneness is observed.     

Opposing effects of phonological similarity on item and order memory of words and nonwords in the serial recall task

This study shows that the classical phonological similarity effect (PSE) in immediate serial recall is critically affected by the lexicality of list items, the type of phonological similarity involved, and the scoring procedure. PSE was present in the serial recall score when phonologically distinct words were compared to words that share the middle vowel and end consonant (rhyming lists). PSE was absent in the serial recall score when phonologically distinct words were compared to words that share the initial and final consonants (consonant frame lists). There was a reversal of PSE in serial recall of nonwords when comparing distinct lists to both types of similar lists. Recall accuracy on the other hand was higher for distinct lists regardless of lexicality. Item errors dominated in relation to order errors in the case of nonwords, whereas order errors dominated in relation to item errors in the case of words. Furthermore, order errors were more common for phonologically similar lists, whereas item errors were more common for phonologically distinct lists. This may be the result of intra‐list and inter‐list interference, respectively. The dominance of the former error type may cause a classical PSE, whereas the dominance of the latter error type may cause a reversal of PSE. Finally, an item identification task yielded no evidence of an association between intra‐list interference and discriminability of items in a list.     

Loss aversion and inhibition in dynamical models of multialternative choice

The roles of loss aversion and inhibition among alternatives are examined in models of the similarity, compromise, and attraction effects that arise in choices among 3 alternatives differing on 2 attributes. R. M. Roe, J. R. Busemeyer, and J. T. Townsend (2001) have proposed a linear model in which effects previously attributed to loss aversion (A. Tversky & D. Kahneman, 1991) arise from attention switching between attributes and similarity-dependent inhibitory interactions among alternatives. However, there are several reasons to maintain loss aversion in a theory of choice. In view of this, an alternative theory is proposed, integrating loss aversion and attention switching into a nonlinear model (M. Usher & J. L. McClelland, 2001) that relies on inhibition independent of similarity among alternatives. The model accounts for the 3 effects and makes testable predictions contrasting with those of the Roe et al. (2001) model.     

Statistical Learning of Unfamiliar Sounds as Trajectories Through a Perceptual Similarity Space

In typical statistical learning studies, researchers define sequences in terms of the probability of the next item in the sequence given the current item (or items), and they show that high probability sequences are treated as more familiar than low probability sequences. Existing accounts of these phenomena all assume that participants represent statistical regularities more or less as they are defined by the experimenters—as sequential probabilities of symbols in a string. Here we offer an alternative, or possibly supplementary, hypothesis. Specifically, rather than identifying or labeling individual stimuli discretely in order to predict the next item in a sequence, we need only assume that the participant is able to represent the stimuli as evincing particular similarity relations to one another, with sequences represented as trajectories through this similarity space. We present experiments in which this hypothesis makes sharply different predictions from hypotheses based on the assumption that sequences are learned over discrete, labeled stimuli. We also present a series of simulation models that encode stimuli as positions in a continuous two‐dimensional space, and predict the next location from the current location. Although no model captures all of the data presented here, the results of three critical experiments are more consistent with the view that participants represent trajectories through similarity space rather than sequences of discrete labels under particular conditions.