Aspects of Endowment: A Query Theory of Value Construction

@article{Johnson2007AspectsOE,
  title={Aspects of Endowment: A Query Theory of Value Construction},
  author={Eric J. Johnson and Gerald H{\"a}ubl and Anat Keinan},
  journal={University of Alberta School of Business Research Paper Series},
  year={2007}
}
How do people judge the monetary value of objects? One clue is provided by the typical endowment study (D. Kahneman, J. L. Knetsch, & R. H. Thaler, 1991), in which participants are randomly given either a good, such as a coffee mug, that they may later sell ("sellers") or a choice between the good and amounts of cash ("choosers"). Sellers typically demand at least twice as much as choosers, inconsistent with economic theory. This result is usually explained by an increased weighting of losses… 
The endowment effect: Loss aversion or a buy-sell discrepancy?
TLDR
A third condition is introduced, in which participants receive an object and are asked how much they are willing to pay to keep it (Pay-to-Keep), and found support for the buy-sell strategy mechanism.
Supplemental Material for The Endowment Effect and Beliefs About the Market
The endowment effect occurs when people assign a higher value to an item they own than to the same item when they do not own it, and this effect is often taken to reflect an ownership-induced change
The Endowment Effect and Beliefs About the Market
TLDR
It is argued that the endowment effect may largely reflect “adaptively rational” behavior on the part of both buyers and sellers (given their beliefs about relevant markets) rather than any ownership-induced bias or change in intrinsic preferences.
The Seller's Sense: Buying–Selling Perspective Affects the Sensitivity to Expected Value Differences
Previous work comparing pricing decisions by buyers and sellers has primarily focused on the endowment effect, the phenomenon that selling prices exceed buying prices. Here, we examine whether
Constructing preference from experience: the endowment effect reflected in external information search.
TLDR
The results add to the increasing evidence that the endowment effect is due, in part, to differences in predecisional information search, by examining differences in search termination in external search.
Unpacking buyer-seller differences in valuation from experience: A cognitive modeling approach
TLDR
A cognitive modeling approach is developed to formalize, disentangle, and compare alternative psychological accounts of buyer-seller differences in pricing decisions of monetary lotteries, and reveals a substantial contribution of simple response bias.
The Influence of Differential Focus on the Endowment Effect in Risky Objects
The robust finding that people systematically assign higher monetary values to sell a good they own than they pay to acquire it (i.e., the endowment effect) was recently explained by the differential
Does the Endowment Effect Prevail When Traders Act Strategically?
Trading is more than a personal valuation of own property. Traders try to anticipate the WTP potential buyers have for the good they want to sell. They do not focus on the value the entitlement has
A distributional and dynamic theory of pricing and preference.
TLDR
A new computational model is formulating that assumes an initial bias or anchor that depends on type of price task (buying, selling, or certainty equivalents) and a stochastic evaluation accumulation process that depend on gamble attributes and provides a superior account of the distributional and dynamic properties of price.
...
...

References

SHOWING 1-10 OF 62 REFERENCES
Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias
A wine-loving economist we know purchased some nice Bordeaux wines years ago at low prices. The wines have greatly appreciated in value, so that a bottle that cost only $10 when purchased would now
Contingent weighting in judgment and choice
Abstract : Preference can be inferred from direct choice between options or from a matching procedure in which the decision maker adjusts one option to match another. Studies of perferences between
Experimental Tests of the Endowment Effect and the Coase Theorem
Contrary to theoretical expectations, measures of willingness to accept greatly exceed measures of willingness to pay. This paper reports several experiments that demonstrate that this "endowment
Focusing on the Forgone: How Value Can Appear So Different to Buyers and Sellers
We propose that buying- and selling-price estimates reflect a focus on what the consumer forgoes in the potential exchange and that this notion offers insight into the well-known difference between
Measuring utility by a single-response sequential method.
TLDR
A sequential experiment that provides, at each stage in the sequence, an estimate of the utility to the subject of some amount of a commodity, and to present a few experimental results obtained with the method.
Goal-Based Construction of Preferences: Task Goals and the Prominence Effect
Preferences inferred from choice are more likely to favor the alternative that is superior with respect to the prominent (most important or salient) attribute than are preferences inferred from
Neoclassical Theory Versus Prospect Theory: Evidence from the Marketplace
Neoclassical theory postulates that preferences between two goods are independent of the consumer's current entitlements. Several experimental studies have recently provided strong evidence that this
Choices, Values, and Frames
We discuss the cognitive and the psy- chophysical determinants of choice in risky and risk- less contexts. The psychophysics of value induce risk aversion in the domain of gains and risk seeking in
Source Credibility in Social Judgment : Bias , Expertise , and the Judge ' s Point of View
Mathematical models of source credibility were tested in five experiments in which judges estimated the value of hypothetical used cars based on blue book value and/or estimates provided by sources
Anchoring, Activation, and the Construction of Values.
  • Chapman, Johnson
  • Psychology
    Organizational behavior and human decision processes
  • 1999
TLDR
This work suggests that anchors affect judgments by increasing the availability and construction of features that the anchor and target hold in common and reducing the availability of features of the target that differ from the anchor.
...
...