The Endowment Effect: Deciding For Oneself Versus Deciding For Others

Shih-Chieh Chuang, National Chung Cheng University, Taiwan
Yin-Hui Cheng, National Taichung University, Taiwan
Sui-Min Wang, National Chung Cheng University, Taiwan
Kuo-shu Hwang, National Yunlin University of Science and Technology, Taiwan
This study examines consumer bidding behavior, based on the results of three experimental studies designed to test the decision-making process for self and others. Personal decision-making is hypothesized to invoke different interpersonal frames that determine the individual trading of an endowed object via the disparity between its buying and selling price. The results of the three studies indicate that when individuals act on others’ behalf, endowment bias is reduced and the lemon problem is avoided. More generally, the authors also elucidate the role played by trading behavior in the decision-making process.
[ to cite ]:
Shih-Chieh Chuang, Yin-Hui Cheng, Sui-Min Wang, and Kuo-shu Hwang (2011) ,"The Endowment Effect: Deciding For Oneself Versus Deciding For Others", in NA - Advances in Consumer Research Volume 39, eds. Rohini Ahluwalia, Tanya L. Chartrand, and Rebecca K. Ratner, Duluth, MN : Association for Consumer Research, Pages: 727-728.