Endowment Effect: Trading for Oneself Versus Trading for Others

Prior research on the endowment effect has tended to focus on decisions made by individuals acting on their own account rather than on others’ behalf. This article reports on three experiments that modeled this “for-self” versus “for-others” distinction and measured its effects on prices. Specifical...

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Bibliographic Details
Published in:Psychological reports 2019-12, Vol.122 (6), p.2298-2319
Main Authors: Wang, Sui-Min, Cheng, Yin-Hui, Lee, Chao-Feng, Chuang, Shih-Chieh
Format: Article
Language:English
Subjects:
Adult
Commerce
Consumer Behavior
Decision Making
Female
Humans
Male
Ownership
Social Behavior
Young Adult
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Summary:Prior research on the endowment effect has tended to focus on decisions made by individuals acting on their own account rather than on others’ behalf. This article reports on three experiments that modeled this “for-self” versus “for-others” distinction and measured its effects on prices. Specifically, our participants who were asked to make trading decisions for other people subsequently reported decreases in the endowment effect. We concluded that, in the context of the trading of goods, perceived ownership and differences in focus on the traded products’ positive and negative features mediated the diminished endowment effect our experiments identified.
ISSN:0033-2941
1558-691X
DOI:10.1177/0033294118802555