The Impact of Temporal Focus on the Endowment Effect

Promothesh Chatterjee, University of South Carolina, USA
Caglar Irmak, University of South Carolina, USA
We examine the impact of past versus future temporal focus on buyers’ and sellers’ evaluations of pre-owned products. Across three studies, we demonstrate that when pre-owned products are presented in the future temporal frame (e.g., “nine years of the product’s lifetime remain”), selling prices are significantly higher than buying prices, an observation of the endowment effect; however, when pre-owned products are presented in the past temporal frame (e.g., “three years of the product’s lifetime have passed”), selling prices of the product are not different from its buying prices, mitigating the well-established endowment effect. Moreover, we show the same effect on evaluation of pre-owned products presented with no temporal framing, for those individuals who have high dispositional past, but not low past orientation.
[ to cite ]:
Promothesh Chatterjee and Caglar Irmak (2010) ,"The Impact of Temporal Focus on the Endowment Effect", in NA - Advances in Consumer Research Volume 37, eds. Margaret C. Campbell, Jeff Inman, and Rik Pieters, Duluth, MN : Association for Consumer Research, Pages: 107-110 .