Endowment Effect As Inertia Equity in Brand Switching

Little research has investigated the behavioral aspect of brand inertia in brand switching based on behavioral decision theory. The present research employs endowment effect to conceptualize the inertia element of brand switching (e.g., from brand A to B). Past research normally separately assesses consumers’ willingness to accept (WTA) to give up brand A and the willingness to pay (WTP) to acquire brand B. The effect postulates that the WTA is normally larger than the WTP. The present research proposes a joint assessment of the endowment effect in brand switching. It uses the price reduction (i.e., inertia equity) that just overcomes brand inertia to measure the difference between WTA and WTP. Empirical evidence demonstrates the conceptualization of endowment effect as inertia equity.



Citation:

Gewei Ye, Curtis Haugtvedt, and Fred Van Raaij (2007) ,"Endowment Effect As Inertia Equity in Brand Switching", in NA - Advances in Consumer Research Volume 34, eds. Gavan Fitzsimons and Vicki Morwitz, Duluth, MN : Association for Consumer Research, Pages: 329-477.

Authors

Gewei Ye, Towson University
Curtis Haugtvedt, Ohio State University
Fred Van Raaij, Tilburg University



Volume

NA - Advances in Consumer Research Volume 34 | 2007



Share Proceeding

Featured papers

See More

Featured

J1. The Effect of Identity Abstractness on Information Processing Styles

Woojin Choi, University of Seoul
Min Jung Kim, Manhattan College
HyukJin Kwon, University of Seoul
Jiyun Kang, Texas State University

Read More

Featured

P8. Understanding Financial Literacy: a Meta-Analysis of the Antecedents, Consequents and Moderators

FERNANDO DE OLIVEIRA SANTINI, UNIVERSIDADE DO VALE DO RIO DOS SINOS - UNISINOS
Frederike Monika Budiner Mette, ESPM, Brazil
Mateus Canniatti Ponchio, ESPM, Brazil
Wagner Junior Ladeira, Unisinos

Read More

Featured

Consumer Response to Innovations: The Differential Effects of Focused and Defocused Attention on Perceived Novelty, Usefulness and Symbolism

Katarina Hellén, Univeristy of Vaasa
Maria Sääksjärvi, Delft University of Technology, The Netherlands

Read More

Engage with Us

Becoming an Association for Consumer Research member is simple. Membership in ACR is relatively inexpensive, but brings significant benefits to its members.