The Role of Anticipated Regret in the Endowment Effect

EXTENDED ABSTRACT - Numerous studies have demonstrated that people persistently demand more money to give up one object than they’re willing to pay to purchase the same object (e.g. Kahnman, Knetsch, and Thaler 1990; Knetsch 1989). This violation of economic norms, commonly known as the endowment effect, is generally explained by loss aversion, the fact that pain from loss exceeds the happiness from acquisition. However, existing literature devoted little attention to the emotional experience individuals have in determining an acceptable price for purchasing or selling an item. This research sets to explore the role of anticipated feelings of regret in creating the persistent disparity between individuals’ willingness to pay (WTP) and willingness to accept (WTA). We propose that people anticipate intense regret if their decisions to buy or sell later turn out bad, and therefore set extreme threshold to both buying and selling to avoid possible regret.



Citation:

Ying Zhang and Ayelet Fishbach (2005) ,"The Role of Anticipated Regret in the Endowment Effect", in NA - Advances in Consumer Research Volume 32, eds. Geeta Menon and Akshay R. Rao, Duluth, MN : Association for Consumer Research, Pages: 66-66.

Authors

Ying Zhang, University of Chicago
Ayelet Fishbach, University of Chicago



Volume

NA - Advances in Consumer Research Volume 32 | 2005



Share Proceeding

Featured papers

See More

Featured

Changes in Social Values in the United States – 1976-2017: Is a New Age of Tribalism Emerging?

Eda Gurel-Atay, Independent Researcher
Johnny Chen, University of Oregon, USA
Wang Suk Suh, University of Oregon, USA
Lynn R. Kahle, University of Oregon, USA

Read More

Featured

Is Warm Always Trusting? The Effect of Seasonality on Trustworthiness

Gretchen Wilroy, Pennsylvania State University, USA
Margaret Meloy, Pennsylvania State University, USA
Simon Blanchard, Georgetown University, USA

Read More

Featured

The Power of the Past: Consumer Nostalgia as a Coping Resource

Dovile Barauskaite, ISM University of Management and Economics
Justina Gineikiene, ISM University of Management and Economics
Bob Fennis, University of Groningen, 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.