IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Endowment Effect in negotiations: group versus individual decision-making

  • Amira Galin


Registered author(s):

    The study’s two aims are: (a) to investigate whether groups, as compared to individuals, show a different degree of Endowment Effect (EE) during the negotiating of intangible assets, such as leisure time and (b) to gain some insight into the underlying mechanism behind groups’ decision-making processes. A total of 138 graduate students were randomly assigned to 35 groups of 3 members each; and 33 were randomly labeled as “individuals.” The study simulated two scenarios in which the students, both individuals and groups, had to decide what their demands from the university authorities were—once as “sellers” and another time as “buyers” in regard to their own leisure time. The findings indicate the presence of an Endowment Effect (EE) in both individuals and groups. However, groups significantly amplified the Endowment Effect in comparison to individuals. The mechanism which best explains why groups tend to amplify negotiating decisions was found to be the “Majority Rule,” but the “leader” also influences such amplification. Copyright Springer Science+Business Media New York 2013

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Springer in its journal Theory and Decision.

    Volume (Year): 75 (2013)
    Issue (Month): 3 (September)
    Pages: 389-401

    in new window

    Handle: RePEc:kap:theord:v:75:y:2013:i:3:p:389-401
    Contact details of provider: Web page:

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Knetsch, Jack L, 1989. "The Endowment Effect and Evidence of Nonreversible Indifference Curves," American Economic Review, American Economic Association, vol. 79(5), pages 1277-84, December.
    2. Luhan, W.J. & Kocher, Martin G. & Sutter, Matthias, 2009. "Group polarization in the team dictator game reconsidered," Munich Reprints in Economics 18216, University of Munich, Department of Economics.
    3. Belk, Russell W, 1988. " Possessions and the Extended Self," Journal of Consumer Research, University of Chicago Press, vol. 15(2), pages 139-68, September.
    4. Knetsch, Jack L & Sinden, J A, 1984. "Willingness to Pay and Compensation Demanded: Experimental Evidence of an Unexpected Disparity in Measures of Value," The Quarterly Journal of Economics, MIT Press, vol. 99(3), pages 507-21, August.
    5. Hoorens, Vera & Remmers, Nicole & van de Riet, Kamieke, 1999. "Time is an amazingly variable amount of money: Endowment and ownership effects in the subjective value of working time," Journal of Economic Psychology, Elsevier, vol. 20(4), pages 383-405, August.
    6. Ortona, Guido & Scacciati, Francesco, 1992. "New experiments on the endowment effect," Journal of Economic Psychology, Elsevier, vol. 13(2), pages 277-296, June.
    7. Gary Bornstein & Ilan Yaniv, 1998. "Individual and Group Behavior in the Ultimatum Game: Are Groups More “Rational†Players?," Experimental Economics, Springer, vol. 1(1), pages 101-108, June.
    8. Gary Bornstein & Matthias Sutter & Tamar Kugler & Martin G. Kocher, . "Trust between individuals and groups: Groups are less rusting than individuals but just as trustworthy," Papers on Strategic Interaction 2005-02, Max Planck Institute of Economics, Strategic Interaction Group.
    9. 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.
    10. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1325-48, December.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:kap:theord:v:75:y:2013:i:3:p:389-401. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)

    or (Christopher F. Baum)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.