Sense and sensibility of ownership: Type of ownership experience and valuation of goods

(Xiao-Tian) Wang, X.T., Lay See Ong and Jolene H. Tan

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2015, vol. 58, issue C, 171-177

Abstract: This study examined how the type of ownership experience affects the valuation of a good. We hypothesized that the sense of ownership is a psychological derivative of resource acquisition and allocation. We predicted a valuation order of stable ownership or no-ownership < alternating (interchanging) ownership < sudden reversals in ownership. One hundred and sixty-six participants played an object-acquisition “game”, a computer simulation of gaining or losing the ownership of an object (e.g., a pen, a mug, or a flashlight) with different outcome sequences, preprogramed but unbeknownst to the participants. After each game, the participant valued the target object by indicating their willingness-to-pay price, if the last outcome was a loss, or willingness-to-accept price, if the last outcome was a gain. The valuation of an object was highest after experiencing a final reversal in ownership from losses to a final gain or from gains to a final loss, followed by alternating ownership and stable (patrimonial) ownership or constant non-ownership. Wins or losses are not created equal due to different trajectories in how people come to own (lose) objects. The results also suggest that loss aversion is better understood as a specific result of ownership experience.

Keywords: Ownership experience; Endowment effect; Loss aversion; Valuation; Pricing (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:58:y:2015:i:c:p:171-177

DOI: 10.1016/j.socec.2015.04.010

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