Articles / Recommended Reading / Theory

The Endowment Effect as Self-Enhancement in Response to Threat

Image credit: http://www.jstor.org/

Image credit: http://www.jstor.org/

The Endowment Effect as Self-Enhancement in Response to Threat
Promothesh Chatterjee
Caglar Irmak
Randall L. Rose

Journal of Consumer Research
Volume 40, Number 3, October 2013
The University of Chicago Press

The discrepancy between willingness to pay and willingness to accept for a product, referred to as the endowment effect, has been investigated and replicated across various domains because of its implications for rational decision making. The authors assume that implicit processes operate in the endowment effect and propose an explanation that is derived from the two main accounts of the effect, ownership and loss aversion. Based on the implicit egotism and self-affirmation literatures, the model argues that selling is perceived as an implicit self-threat and that sellers, as a part of their automatic defense mechanism, respond to this self-threat by enhancing the value of the self-associated object. Five studies test these conjectures and provide support for the proposed model.

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