The endowment effect in the future: how time shapes buying and selling prices

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  • dc.contributor.author Yamamoto, Shohei
  • dc.contributor.author Navarro-Martinez, Daniel
  • dc.date.accessioned 2023-05-03T12:14:20Z
  • dc.date.available 2023-05-03T12:14:20Z
  • dc.date.issued 2022
  • dc.description Includes supplementary materials: replication file; experimental instructions.
  • dc.description.abstract Previous research has focused on studying the endowment effect for transactions that take place in the present. Many real-world transactions, however, are delayed into the future (i.e., people agree to buy or sell, but the actual transaction does not materialize until a later time). Here we investigate how transaction timing affects the endowment effect. In five studies, we show that the endowment effect systematically increases as transactions are delayed into the future. Specifically, buying prices significantly decrease as the transaction is delayed, while selling prices remain constant, resulting in an amplified endowment effect (Experiment 1). This pattern is not produced by a discounting of the money involved in the transaction (Experiment 2), and it holds across different types of items (Experiment 3). We also show that the phenomenon cannot be explained by sellers anticipating becoming increasingly attached to the items over time (Experiment 4). Finally, we demonstrate that this increased endowment effect in the future holds in the field, in the context of a real market and with real transactions (Experiment 5).
  • dc.description.sponsorship The authors acknowledge financial support from the Spanish Ministry of Science and Innovation (grant PID2019–105249GB–I00), the BBVA foundation (grant Fundacion BBVA–EI–2019-D.Navarro) and the Ramon Areces foundation (grant Fundacion Ramon Areces 2019-Navarro).
  • dc.format.mimetype application/pdf
  • dc.identifier.citation Yamamoto S, Navarro-Martinez D. The endowment effect in the future: how time shapes buying and selling prices. Judgment and Decision Making. 2022 Sep;17(5):988-1014. DOI: 10.1017/S1930297500009293
  • dc.identifier.doi http://dx.doi.org/10.1017/S1930297500009293
  • dc.identifier.issn 1930-2975
  • dc.identifier.uri http://hdl.handle.net/10230/56662
  • dc.language.iso eng
  • dc.publisher Cambridge University Press
  • dc.relation.ispartof Judgment and Decision Making. 2022 Sep;17(5):988-1014
  • dc.relation.isreferencedby https://osf.io/re9h5/?view_only=5d4f7a1e74f54fd2ae2cb6a9dc5f0789
  • dc.relation.projectID info:eu-repo/grantAgreement/ES/2PE/PID2019-105249GB-I00
  • dc.rights © 2022. The authors license this article under the terms of the Creative Commons Attribution 4.0 License.
  • dc.rights.accessRights info:eu-repo/semantics/openAccess
  • dc.rights.uri http://creativecommons.org/licenses/by/4.0/
  • dc.subject.keyword Endowment effect
  • dc.subject.keyword Intertemporal choice
  • dc.subject.keyword Choice delay
  • dc.title The endowment effect in the future: how time shapes buying and selling prices
  • dc.type info:eu-repo/semantics/article
  • dc.type.version info:eu-repo/semantics/publishedVersion

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