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Explaining the Endowment Effect through Ownership: The Role of Identity, Gender, and Self-Threat

Sara Loughran Dommer and Vanitha Swaminathan
Journal of Consumer Research
Vol. 39, No. 5 (February 2013), pp. 1034-1050
Published by: Oxford University Press
DOI: 10.1086/666737
Stable URL: http://www.jstor.org/stable/10.1086/666737
Page Count: 17
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Explaining the Endowment Effect through Ownership: The Role of
                    Identity, Gender, and Self-Threat
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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.

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