Explaining the endowment effect through ownership: The role of identity, gender, and self-threat

Sara Loughran Dommer, Vanitha Swaminathan

Research output: Contribution to journalArticlepeer-review

71 Scopus citations

Abstract

The price people are willing to pay for a good is often less than the price they are willing to accept to give up the same good, a phenomenon called the endowment effect. Loss aversion has typically accounted for the endowment effect, but an alternative explanation suggests that ownership creates an association between the item and the self, and this possession-self link increases the value of the good. To test the ownership account, this research examines three moderators that theory suggests should affect the possession-self link and consequently the endowment effect: self-threat, identity associations of a good, and gender. After a social self-threat, the endowment effect is strengthened for in-group goods among both men and women but is eliminated for out-group goods among men (but not women). These results are consistent with a possession-self link explanation and therefore suggest that ownership offers a better explanation for the endowment effect.

Original languageEnglish (US)
Pages (from-to)1034-1050
Number of pages17
JournalJournal of Consumer Research
Volume39
Issue number5
DOIs
StatePublished - Feb 2013

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Anthropology
  • Arts and Humanities (miscellaneous)
  • Economics and Econometrics
  • Marketing

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