Possession attachment: Individual differences in the endowment effect

The endowment effect suggests that people become attached to objects that are in their possession, and they demand a higher price to sell an object they own than they would be willing to pay to buy the same object. The results of four experiments support the suggestion that “possession attachment” is related to adult attachment styles in close relationships. Measures of attachment style in close relationships significantly predicted both actual and hypothetical selling prices moderating the endowment effect (Study 1), and significantly correlate with ratings of possession attachment (Study 2). Specifically, attachment anxiety is positively correlated with the selling prices of objects, while attachment avoidance shows no significant relation with object evaluation. The third and fourth experimental studies further demonstrated that attachment anxiety enhances possession evaluation and inhibits trades. The studies used real commodities and real money, and therefore, they have implications for everyday decisions as well as for the development of theories to better understand decisions about trades, negotiations, and choice of goods. Copyright © 2010 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.     

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.     

Role of social value orientation in the endowment effect

The purpose of the present research was to explore the role of social value orientation in the endowment effect. The study gathered 190 participants from university students in Taiwan: 74 of these were classified as individualists, 44 as competitors and 56 as prosocials, with 16 being unclassified. Results from an experimental study indicated that the individualists' and competitors' average selling prices were significantly higher than the average buying prices for a commodity; thus the endowment effect was observed in these two orientations. The endowment effect was not observed in those having a prosocial orientation, however.     

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 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.     

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.     

Risk taking in achievement-oriented situations: Do people really maximize affect or competence information?

Several studies of choice behavior (risk taking) in achievement-oriented situations are reanalyzed. The usual ways of pooling all choices over trials and subjects conceal the series of subjects' decisions and the dynamics inherent in these decisions. A basic strategy of subjects in an achievement-oriented choice situation seems to be to start with an easy task, choose a more difficult one whenever you succeed, and stay mostly at the same difficulty level whenever you fail. A computer model, in which such simple assumptions are made, generates preference functions over the order of difficulty levels that are indistinguishable from those found in empirical studies. It is concluded that the study of choice behavior in achievement-oriented situations should be based on the analysis of the series of single decisions by one subject. For this we need models that allow the predictions of such decisions and the prediction of action-controlling cognitions and emotions.     

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 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.     

情绪对跨期决策的影响

近年来, 情绪对跨期决策的影响逐渐成为一个新的研究趋势。根据情绪发生于跨期决策过程中的时间, 可以将其分为决策前情绪、决策中情绪和决策后情绪。目前关于情绪与跨期决策的研究, 尤其是决策前情绪影响跨期决策的研究, 大多还只是停留在揭示现象的阶段, 较少有研究直接验证其中的影响机制。综合运用行为实验和神经影像学的手段从认知过程和决策过程揭示情绪影响跨期决策的行为机制和神经机制, 将有助于加深对跨期决策心理机制的理解, 并帮助人们更好地利用和控制情绪以做出更满意的决策。未来研究还需加强研究的深度和生态效度, 如考察动态情绪、日常情绪和复杂情绪对跨期决策的影响, 并在情绪干预方面进行更多的尝试和探索。     

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.     

Linking together different measures of preference: A dynamic model of matching derived from decision field theory

Two frequently used tasks for measuring preferences among gambles are choice and selling price tasks. However, the rank orders observed with these tasks do not agree, and these disagreements are called preference reversals. In this article, we propose an extension of decision field theory that was originally designed to account for choice probability and the distribution of choice response times. In this extension, we show how this same theory can be used to derive predictions for the distribution of values produced by selling price tasks. This model not only accounts for the basic preference reversal results but also can explain the effects of various information processing factors on preference reversals including time, effort, and practice. We conclude by summarizing the advantages of the decision field matching model over two earlier models of choice and selling prices—expression theory and the contingent weighting model.     

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.     

Aspects of endowment: a query theory of value construction

How do people judge the monetary value of objects? One clue is provided by the typical endowment study (D. Kahneman, J. L. Knetsch, & R. H. Thaler, 1991), in which participants are randomly given either a good, such as a coffee mug, that they may later sell ("sellers") or a choice between the good and amounts of cash ("choosers"). Sellers typically demand at least twice as much as choosers, inconsistent with economic theory. This result is usually explained by an increased weighting of losses, or loss aversion. The authors provide a memory-based account of endowment, suggesting that people construct values by posing a series of queries whose order differs for sellers and choosers. Because of output interference, these queries retrieve different aspects of the object and the medium of exchange, producing different valuations. The authors show that the content and structure of the recalled aspects differ for selling and choosing and that these aspects predict valuations. Merely altering the order in which queries are posed can eliminate the endowment effect, and changing the order of queries can produce endowment-like effects without ownership.     

Buying and Selling Prices of Investments: Configural Weight Model of Interactions Predicts Violations of Joint Independence

Judges evaluated buying and selling prices of hypothetical investments, based on the previous price of each investment and estimates of the investment's future value given by advisors of varied expertise. Effect of a source's estimate varied in proportion to the source's expertise, and it varied inversely with the number and expertise of other sources. There was also a configural effect in which the effect of a source's estimate was affected by the rank order of that source's estimate, in relation to other estimates of the same investment. These interactions were fit with a configural weight averaging model in which buyers and sellers place different weights on estimates of different ranks. This model implies that one can design a new experiment in which there will be different violations of joint independence in different viewpoints. Experiment 2 confirmed patterns of violations of joint independence predicted from the model fit in Experiment 1. Experiment 2 also showed that preference reversals between viewpoints can be predicted by the model of Experiment 1. Configural weighting provides a better account of buying and selling prices than either of two models of loss aversion or the theory of anchoring and insufficient adjustment.     

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。     

青少年情绪预测偏差与决策的关系研究

在决策过程中人们通常选择那些使其感到快乐的行为,决策结果与所预测的高兴或悲伤、满意或不满意紧密相连,以往研究发现这类预测即情绪预测存在偏差。本研究以188名中小学生为被试,采用自编情绪评定表和最后通牒游戏范式,对情绪预测偏差与决策的关系进行探索。结果表明青少年在预测对未来事件的情绪反应时存在强度偏差和持续时间偏差,情绪预测的强度偏差和持续时间偏差影响青少年回避或趋向决策。     

偶然情绪对延迟选择的影响机制

本研究旨在探讨偶然情绪对延迟选择的影响及影响机制。本研究包括两个实验, 在被试进行决策前, 分别采用图片和短片诱发其与当前决策任务无关的偶然情绪, 然后要求被试完成选择任务, 并从决策结果和决策过程两个角度考察偶然情绪对延迟选择的影响及影响机制。结果发现, 当可选项中不存在1个优势选项时, 与正性情绪相比, 个体在负性情绪下会更倾向于延迟选择, 而个体对决策信息的加工深度在偶然情绪对延迟选择的影响中具有中介作用。这可能是因为相比于正性情绪, 个体在负性情绪下会采用更深入的加工策略, 增加了决策难度, 进而提高了个体的延迟选择倾向。