The effect of physical possession on preference for product warranty

Robin Chark and A.V. Muthukrishnan

International Journal of Research in Marketing, 2013, vol. 30, issue 4, 424-425

Abstract: Peck and Shu (2009) found that touching a product causes greater endowment effect. We seek to replicate and extend this finding to the case that whether touching a product consumers have just bought may increase the willingness to pay (WTP) for warranty. Loss aversion, the tendency to prefer avoiding losses over obtaining equivalent monetary gains, often explains product warranty purchases. This tendency will be stronger when the buyers consider the product as part of their endowment. Touching the product promotes stronger ownership perception and thus shifts consumer's reference point. The new reference point causes consumers to anticipate greater pain from the loss of the product and thus leads to higher WTP for product warranty protection. We find support for this hypothesis in two field studies with a total of 104 participants.

Keywords: Endowment effect; Loss aversion; Warranty; Touch; Physical possession; Ownership perception (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ijrema:v:30:y:2013:i:4:p:424-425

DOI: 10.1016/j.ijresmar.2013.07.004

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