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The Role of Materialism in the Endowment Effect

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Author Info
I. LENS
M. PANDELAERE ()
L. WARLOP
Abstract

Past research documents an asymmetry between consumers’ willingness to pay for an object and their willingness to accept to give up this object. The current paper presents three studies which demonstrate that materialism moderates this “endowment effect”. Although materialism is not related to willingness-to-pay, materialism is positively related to minimum selling prices for endowed objects. Increasing the attachment to material values with a mortality salience procedure augments the endowment effect even more, particularly for materialists. Our findings validate minimum selling prices for endowed objects as an indirect measure of materialism and qualify the prevalence of the endowment effect.

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Paper provided by Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 09/578.

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Length: 27 pages
Date of creation: Apr 2009
Date of revision:
Handle: RePEc:rug:rugwps:09/578

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  5. Van Boven, Leaf & Loewenstein, George & Dunning, David, 2003. "Mispredicting the endowment effect:: Underestimation of owners' selling prices by buyer's agents," Journal of Economic Behavior & Organization, Elsevier, vol. 51(3), pages 351-365, July. [Downloadable!] (restricted)
  6. Munro, Alistair & Sugden, Robert, 2003. "On the theory of reference-dependent preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 50(4), pages 407-428, April. [Downloadable!] (restricted)
  7. Carmon, Ziv & Wertenbroch, Klaus & Zeelenberg, Marcel, 2003. " Option Attachment: When Deliberating Makes Choosing Feel Like Losing," Journal of Consumer Research: An Interdisciplinary Quarterly, University of Chicago Press, vol. 30(1), pages 15-29, June.
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  11. Mandel, David R., 2002. "Beyond mere ownership: transaction demand as a moderator of the endowment effect," Organizational Behavior and Human Decision Processes, Elsevier, vol. 88(2), pages 737-747, July. [Downloadable!] (restricted)
  12. Morrison, Gwendolyn C, 1997. "Willingness to Pay and Willingness to Accept: Some Evidence of an Endowment Effect," Applied Economics, Taylor and Francis Journals, vol. 29(4), pages 411-17, April. [Downloadable!] (restricted)
  13. Franciosi, Robert & Kujal, Praveen & Michelitsch, Roland & Smith, Vernon & Deng, Gang, 1996. "Experimental tests of the endowment effect," Journal of Economic Behavior & Organization, Elsevier, vol. 30(2), pages 213-226, August. [Downloadable!] (restricted)
  14. Richins, Marsha L & Dawson, Scott, 1992. " A Consumer Values Orientation for Materialism and Its Measurement: Scale Development and Validation," Journal of Consumer Research: An Interdisciplinary Quarterly, University of Chicago Press, vol. 19(3), pages 303-16, December.
  15. Belk, Russell W, 1985. " Materialism: Trait Aspects of Living in the Material World," Journal of Consumer Research: An Interdisciplinary Quarterly, University of Chicago Press, vol. 12(3), pages 265-80, December.
  16. Tversky, Amos & Kahneman, Daniel, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1039-61, November. [Downloadable!] (restricted)
  17. Ger, Guliz & Belk, Russell W., 1996. "Cross-cultural differences in materialism," Journal of Economic Psychology, Elsevier, vol. 17(1), pages 55-77, February. [Downloadable!] (restricted)
  18. Lin, Chien-Huang & Chuang, Shih-Chieh & Kao, Danny T. & Kung, Chaang-Yung, 2006. "The role of emotions in the endowment effect," Journal of Economic Psychology, Elsevier, vol. 27(4), pages 589-597, August. [Downloadable!] (restricted)
  19. Bateman, Ian J, et al, 1997. "A Test of the Theory of Reference-Dependent Preferences," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 479-505, May.
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