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Aspects of Endowment: A Query Theory of Value Construction
Journal
Journal of Experimental Psychology: Learning, Memory, and Cognition
ISSN
0278-7393
ISSN-Digital
1939-1285
Type
journal article
Date Issued
2007-05-01
Author(s)
Abstract
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, or loss aversion. The authors provide a memory-based account of endowment, suggesting that people construct values by posing a series of queries whose order differs for sellers and choosers. Because of output interference, these queries retrieve different aspects of the object and the medium of exchange, producing different valuations. The authors show that the content and structure of the recalled aspects differ for selling and choosing and that these aspects predict valuations. Merely altering the order in which queries are posed can eliminate the endowment effect, and changing the order of queries can produce endowment-like effects without ownership
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
American Psychological Association
Publisher place
Washington, DC
Volume
33
Number
3
Start page
461
End page
474
Pages
14
Subject(s)
Division(s)
Eprints ID
220736