Explanations of the endowment effect: an integrative review

  title={Explanations of the endowment effect: an integrative review},
  author={Carey K. Morewedge and Colleen E. Giblin},
  journal={Trends in Cognitive Sciences},

Figures from this paper

The extended self, product valuation, and the endowment effect
Various explanations have been proposed to account for discrepancies in product valuation, pertaining particularly to the buyer-seller valuation gap called the endowment effect. Previous research has
The Endowment Effect and Beliefs About the Market
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.
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
The endowment effect: Loss aversion or a buy-sell discrepancy?
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
What explains observed reluctance to trade? A comprehensive literature review
Valuation gaps and exchange asymmetries are among the most widely studied phenomena in the field of behavioral economics. The purpose of this chapter is to present the current state of the social
ff ects on valuation of ambiguously appraised products
Valuation in markets of ambiguously appraised products is often performed by a group of recognized experts using centralized evaluation frameworks. Current business practices and technologies allow


A Reference Price Theory of the Endowment Effect
The common finding that selling prices exceed buying prices (the so-called endowment effect) is typically explained by the assumptions that consumers evaluate potential transactions with respect to
The Endowment Effect
The endowment effect is among the best known findings in behavioral economics and has been used as evidence for theories of reference-dependent preferences and loss aversion. However, a recent
Is the Endowment Effect an Expectations Effect
A hallmark result within behavioral economics is that individuals' choices are affected by current endowments. A recent theory due to Kőszegi and Rabin ( , Quarterly Journal of Economics, 121,
The Effect of Giving It All Up on Valuation: A New Look at the Endowment Effect
In three experiments we show that the endowment effect---the tendency to demand more money for relinquishing owned goods than one is willing to pay for the same goods---fails to emerge when sellers
Learning to Like What You Have - Explaining the Endowment Effect
The endowment effect describes the fact that people demand much more to give up an object than they are willing to spend to acquire it. The existence of this effect has been documented in numerous
The Endowment Effect as Self-Enhancement in Response to Threat
The discrepancy between willingness to pay (WTP) and willingness to accept (WTA) for a product, referred to as the endowment effect, has been investigated and replicated across various domains
Explaining the Endowment Effect through Ownership: The Role of Identity, Gender, and Self-Threat
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
Evolutionary Origins of the Endowment Effect : Evidence from Hunter-Gatherers †
The endowment effect, the tendency to value possessions more than non-possessions, is a well-known departure from rational choice and has been replicated in numerous settings. We investigate the