Good self, bad self: Initial success and failure moderate the endowment effect

Theodore Alexopoulos, Milija Šimleša and Mélanie Francis

Journal of Economic Psychology, 2015, vol. 50, issue C, 32-40

Abstract: Recent research on the endowment effect (a gap between selling and buying prices for the same good) considers as a working hypothesis that an endowed good becomes part of the self. Consequently, the endowment effect is viewed as a self-enhancement strategy originating or following from this self-object link. Within this perspective, subsequent self-threat typically enhances the endowment effect, whereas self-affirmation eliminates the endowment effect. Contrasting these findings and drawing on the idea that initial self-evaluations constrain the value of a newly acquired object, we reasoned that failures (successes) of the self experienced before the endowment will lower (raise) the value of possessions and influence the endowment effect accordingly. In Studies 1 and 2, we show that a private self-threat (vs. no threat) induced before endowing (vs. presenting) participants with a good eliminates the endowment effect. In Study 3, we show that feelings of pride (vs. no pride) induced via proprioceptive feedback yields a reliable endowment effect. These findings suggest that initial self-success/failure moderate the endowment effect and further show that bodily cues influence property transaction.

Keywords: Bodily cues; Endowment effect; Feedback; Ownership; Pride; Self-threat (search for similar items in EconPapers)
JEL-codes: C91 D82 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:50:y:2015:i:c:p:32-40

DOI: 10.1016/j.joep.2015.07.002

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