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.     

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.     

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。     

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。     

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.     

“Piensa” twice: On the foreign language effect in decision making

In this article, we assess to what extent decision making is affected by the language in which a given problem is presented (native vs. foreign). In particular, we aim to ask whether the impact of various heuristic biases in decision making is diminished when the problems are presented in a foreign language. To this end, we report four main studies in which more than 700 participants were tested on different types of individual decision making problems. In the first study, we replicated Keysar et al.’s (2012) recent observation regarding the foreign language effect on framing effects related to loss aversion. In the second section, we assessed whether the foreign language effect is present in other types of framing problems that involve psychological accounting biases rather than gain/loss dichotomies. In the third section, we studied the foreign language effect in several key aspects of the theory of decision making under risk and uncertainty. In the fourth study, we assessed the presence of a foreign language effect in the cognitive reflection test, a test that includes logical problems that do not carry emotional connotations. The absence of such an effect in this test suggests that foreign language leads to a reduction of heuristic biases in decision making across a range of decision making situations and provide also some evidence about the boundaries of the phenomenon. We explore several potential factors that may underlie the foreign language effect in decision making.     

Overpredicting and Underprofiting in Pricing Decisions

This research examines sellers' price‐setting behavior and discovers a naturally occurring mismatch between sellers and buyers: Sellers who make a price decision often consider alternative prices and engage in the joint evaluation mode, whereas buyers who make a purchase decision see only the finally set price and are in the single evaluation mode. This mismatch in evaluation modes leads sellers to overpredict buyers' price sensitivity and underprice their products. However, these effects apply only to products unfamiliar to buyers and without salient reference prices and can be alleviated if sellers are encouraged to mimic single evaluation when making pricing decisions. These propositions are empirically tested and verified. Copyright © 2011 John Wiley & Sons, Ltd.     

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.     

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.     

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.     

Tablets,touchscreens, and touchpads: How varying touch interfaces trigger psychological ownership and endowment

As mouse-driven desktop computers give way to touchpad laptops and touchscreen tablets, the role of touch in online consumer behavior has become increasingly important. This work presents initial explorations into the effects of varying touch-based interfaces on consumers, and argues that research into the interfaces used to access content can be as important as research into the content itself. Two laboratory studies using a variety of touch technologies explore how touchscreen interfaces can increase perceived psychological ownership, and this in turn magnifies the endowment effect. Touch interfaces also interact with importance of product haptics and actual interface ownership in their effects on perceived product ownership, with stronger effects for products high in haptic importance and interfaces that are owned. Results highlight that perceptions of online products and marketing activities are filtered through the lens of the interfaces used to explore them, and touch-based devices like tablets can lead to higher product valuations when compared to traditional computers.     

Exploring and Estimating the Revenues and Profits of Participants in Stolen Data Markets

Researchers have begun to explore the problem of mass data breaches, where consumer information is acquired by cybercriminals and sold in open markets on-line. Although studies document the social processes of the market and relationships between buyers and sellers, few have considered the revenues earned from market transactions. This study explored these issues using a sample of threads from 10 Russian language and 3 English language Web forums used to sell stolen data. Estimates were generated on the total number of transactions completed by participants along with the advertised prices for the two most common forms of personal information sold. The findings demonstrated that buyers may earn a range of revenues from the sale of stolen data, although this figure was smaller than the potential profits earned from fraudulent use and identity crimes by data buyers. The implications of this study for cybercrime research and policy are explored in detail.     

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.     

Foreign Language Effect and Psychological Distance

Does using a foreign language result in forming different moral decisions than using our mother tongue? Two studies were conducted to investigate whether there is a relationship between foreign language effects (differences between native vs. foreign language conditions) and psychological distance. Study 1 tested four moral dilemmas adapted from Greene et al. (Cognition 107: 1144–1155, 2008). Non-fluent Korean–English bilingual participants (N = 161) indicated decisions regarding four moral dilemmas in either Korean or English languages. The study found that for personal moral conflict situations, in which emotion and automatic intuition were more important than deliberation, there were significant differences in ratios of utilitarian decisions between the native language (L1) and the foreign language (L2) conditions. The participants tended to make more utilitarian decisions in L2 than in L1, which implies reduced emotionality in L2. Study 2 examined whether the psychological distance increased using the foreign language (English) utilizing an automatic self-test. Nonproficient Korean–English bilinguals (N = 26) formed associations between three kinds of geometric shapes (ellipses, rectangles and triangles) and three kinds of labels (‘me’, ‘friends’ and ‘others’). The results of the study found the self-bias effect decreased when labels were presented in the foreign language (in English). This implies that the foreign language effect resulted from the reduced emotional response, and deliberation in decision making which may result from increased psychological distance.     

Exploring the linkages between formal ownership and psychological ownership for the organization: The mediating role of organizational justice

Extending previous research on formal ownership and psychological ownership in organizations, this study simultaneously examines the relationships between employee participation in three formal ownership programmes (i.e. profit sharing, participation in decision making, access to business information) and psychological ownership for the organization, while also exploring the mediating roles of distributive and procedural justice. Data were collected from 387 R&D engineers based at 20 high‐technology firms in Taiwan. A structural equation modelling analysis was conducted to test our hypotheses, and the results show that employee participation in profit sharing, decision making, and access to business information were all positively related to psychological ownership. Moreover, distributive justice fully mediated the relationship between participation in profit sharing and psychological ownership, while procedural justice mediated the relationship between participation in decision making, access to business information, and psychological ownership.     

The extensibility of the endowment effect to others is mediated by degree of intimacy

Recent studies have suggested that the endowment effect may actually be a type of self‐referent cognitive bias due to the mere ownership of an object. However, it is not adequately understood how the ownership of an object affects the endowment effect. The current research is the first to explore if the endowment effect could be extended to different ownerships. The results suggest that the endowment effect extends to goods owned by their mothers, romantic partners and close friends, but not acquaintances. Furthermore, the level of intimacy between individuals and mothers/romantic partners/close friends/acquaintances mediates the relationship between the effect of ownership and the extensibility of the endowment effect. These findings are consistent with the mere ownership effect that ownership increases valuation by enhancing the salience of the self.     

When consumers own their work: Psychological ownership and consumer citizenship on crowdsourcing platforms

The growth of crowdsourced platforms for consumer products has opened many interesting research questions on the impact of consumers participating in such crowdsourced work. In this paper, we focus on consumers' psychological ownership of the crowdsourced product and the role it plays in the relationship between consumer work and consumer citizenship. Further, drawing on social comparison theory, we show that consumers' perceived amount of work relative to others is a boundary condition for this explanation. Finally, we examine the theoretical contributions and managerial implications of our findings.     

买卖交易中谈判者角色影响谈判结果的机制

现实生活中的谈判通常发生在特定的社会情境中, 谈判者也总在扮演着某种角色。本研究探索了买卖交易谈判中谈判者角色影响谈判结果的作用机制。研究提出了一个关于谈判者角色诱发框架效应的理论模型, 然后通过两个模拟谈判实验对这一模型进行验证。实验1表明, 买家知觉到的馅饼大于卖家知觉到的馅饼, 且谈判者知觉到的馅饼在谈判者角色与谈判者绩效间起部分中介作用。实验2发现, 即使保留买家与卖家的角色标签, 如果剥离了金钱作为交易介质这一重要特征, 两个谈判角色知觉到的馅饼也没有差异。研究揭示了谈判者角色影响谈判结果的作用机制, 对谈判者如何利用情境因素取得更好的谈判结果具有实践意义。     

Mere exposure and the endowment effect on consumer decision making

Previous researchers (e.g., J. A. Bargh, 1992, 2002) demonstrated the importance of nonconscious processes on consumer choice behavior. Using an advertisement, the authors determined the effect of two nonconscious processes--the mere exposure effect, which increases object preference by increasing consumer exposure to an object, and the endowment effect, which increases object valuation by providing consumer possession of an object--on consumer behavior. Although the mere exposure effect and endowment effect did not produce an interaction, they produced independent effects. The endowment effect increased object valuation but not object preference. The mere exposure effect increased object preference but not object valuation. Thus, at the unconscious level, an increase in object preference does not lead to an increase in object valuation, nor does an increase in object valuation lead to an increase in object preference. The authors discuss the importance of developing measures of unconscious process in advertising effectiveness.     

产品评价的来源国效应

自Schooler（1965）开始对来源国效应进行实证研究之后,来源国效应引起了人们的广泛关注。学者们分别在个人购买和工业购买领域,采用调查、实验、联合分析、元分析及其它方法（如深度访问法）进行了大量的研究。研究结果表明,来源国效应是一种普遍存在的现象,但是受到多种因素的影响,这些因素包括其它外在产品属性、消费者的知识背景或经验、产品属性信息、产品类别以及消费者的民族差异。为了解释来源国效应这一现象,研究者提出了多种假说或模型,代表性的是信号假说、独立属性假说、概构模型和弹性模型