Please wait a minute...
Acta Psychologica Sinica
Introducing Neutrals: A Reinterpretation of the Endowment Effect
CHEN Qunlin;YUAN Xiaolin;JIA Lei;XIAO Shaobei;ZHANG Qinlin
(1 Key Laboratory of Cognition and Personality, Ministry of Education, Southwest University, Chongqing 400715, China) (2 School of Psychology, Southwest University, Chongqing 400715, China) (3 College of Educational Science, Hainan Normal University, Haikou 571158, China)
Download: PDF(296 KB)  
Export: BibTeX | EndNote | Reference Manager | ProCite | RefWorks    
Abstract  In behavioral economics, the endowment effect refers to the phenomenon that people usually demand higher prices to relinquish an object they own than they would be willing to pay to acquire the object they did not own (Kahneman, Knetsch, & Thaler, 1990). For this phenomenon, dozens of studies have found the significant disparity between willingness to pay (WTA) and willingness to accept compensation (WTA), and this disparity is believed as an important reason to account for this effect. However, the WTA-WTP disparity cannot adequately interpret the endowment effect because sellers or buyers may be irrational traders. Therefore it is necessary to compare the endowment effect with the rational behavior. For this reason, in the present study we introduced the neutrals whose evaluation was regarded as reference price for reinterpreting endowment effect. In addition, one notable weakness of the previous researches in this domain is that the time period of the ownership is ignored. Although endowment effect can come from an instant valuation, the ownership in real life is dynamic and it may change with the time. Thereby, it is necessary to weigh the endowment effect on a dynamic time of change. Considering that, we inspected the changes of the WTA-WTP disparity in two continuous time periods including “past-present” and “present-future”. In this study, we posited that valuation of sellers or buyers was decreased both in the “past-present” and “present-future” time periods, whereas WTA-WTP disparity was unchanged. When the valuation of neutrals as reference price (market price, MP) was introduced, WTA-WTP disparity would be divided into two parts: WTA-MP and MP-WTP. We inferred that MP would decline into a range between WTA and WTP, and the variation tendency of WTA-MP would be different from MP-WTP in a given time period. A total of 674 undergraduates and 35 computer sellers participated in three experiments. In Experiment 1, the participants were randomly assigned to each of 12 scenarios: 3 roles (seller, buyer, and neutral) × 4 time periods from past to present (3 months, 6 months, 12 months, and 24 months). Participants were asked to fill in expected price for a bike after reading a description including its cost price and usage time. In Experiment 2, participants were randomly assigned to each of 8 scenarios: 2 roles (seller and buyer) × 4 time periods from present to future (3 months, 6 months, 12 months, and 24 months). Besides that, 35 computer sellers were specifically assigned to all of 4 time scenarios as the neutrals. They were asked to fill in expected price for a computer after reading a description including its cost price, usage time and configuration. The results revealed that: (1) in all three experiments, selling price was always higher than the buying price, and this gap (WTA-WTP) was even unchanged both in the “past-present” and “present-future” time periods. (2) When valuation of neutrals was introduced as reference price, selling price was closed to reference price in three months, and their gap (WTA-MP) gradually increased following the time prolonging of the ownership. Whereas buying price was closed to reference price in a long time period of two years, and their gap (MP-WTP) gradually decreased following the time prolonging of the ownership. To sum up, the present study showed that endowment effect in trade stably existed even in a long time period. Whereas the introduction of the neutrals, which take the endowment effect into a dynamic time course, could provide a new perspective for the contestable previous viewpoints.
Keywords endowment effect      neutral      seller      buyer      time     
Corresponding Authors: ZHANG Qinlin   
Issue Date: 20 March 2013
E-mail this article
E-mail Alert
Articles by authors
Cite this article:   
. Introducing Neutrals: A Reinterpretation of the Endowment Effect[J]. Acta Psychologica Sinica,2013, 45(3): 345-352.
URL:     OR
[1] GONG Shaoying, SHANGGUAN Chenyu, ZHAI Kuihu, GUO Yawei.  The effects of emotional design on multimedia learning[J]. Acta Psychologica Sinica, 2017, 49(6): 771-782.
[2] ZHANG Jijia; ZHANG Yuzhi. The time course of semantic radical’s semantic and syntax activation under radical priming paradigm[J]. Acta Psychologica Sinica, 2016, 48(9): 1070-1081.
[3] LI Heng; ZHANG Jijia. Chinese native speakers’ processing of different time sentences in auditory tasks[J]. Acta Psychologica Sinica, 2016, 48(6): 617-624.
[4] XIE Heping; WANG Fuxing; ZHOU Zongkui; WU Peng. Cueing effect in multimedia learning: A meta-analysis[J]. Acta Psychologica Sinica, 2016, 48(5): 540-555.
[5] DUAN Jinyun; GU Xiaohua; SUN Luying. The influence of explicit self-esteem, implicit self-esteem and the discrepancies between them on advice taking[J]. Acta Psychologica Sinica, 2016, 48(4): 371-384.
[6] LIU Yang; SUN Yan. Time unpacking effect and its impact on intertemporal decision making[J]. Acta Psychologica Sinica, 2016, 48(4): 362-370.
[7] . An elaboration on the underlying mechanisms through which consumers’ desire for product touch forms: A cognitive experiential perspective[J]. Acta Psychologica Sinica, 2016, 48(4): 410-422.
[8] WANG Tao; FENG Wenting; WEI Hua; ZHOU Nan. Loneliness makes me fall in love with you: The influence of product display on lonely individual’s product preference[J]. Acta Psychologica Sinica, 2016, 48(4): 398-409.
[9] YE Yonghao; XU Yan; ZHU Yijie; LIANG Jiongqian; LAN Tian; YU Miao. The characteristics of moral emotions of Chinese netizens towards an anthropogenic hazard: A sentiment analysis on Weibo[J]. Acta Psychologica Sinica, 2016, 48(3): 290-304.
[10] CUI Yichen; WANG Pei; TAN Chenhao. The influence of implicit theories of personality on processing strategy of person impressions[J]. Acta Psychologica Sinica, 2016, 48(12): 1538-1550.
[11] JIANG Yingjie; WANG Zhiwei; ZHENG Mingling; JIN Xuelian. How value-based agendas affect study time allocation: An eye tracking study[J]. Acta Psychologica Sinica, 2016, 48(10): 1229-1238.
[12] GAO Xuemei; WENG Lei; ZHOU Qun; ZHAO Cai; LI Fang. Dose Violent Offenders Have Lower Capacity of Empathy for Pain: Evidence from ERPs[J]. Acta Psychologica Sinica, 2015, 47(4): 478-487.
[13] YAN Bihua; YOU Xuqun. Pilots’ Dissociation of Object Properties and Motion Properties in Relative Arrival Time Tasks[J]. Acta Psychologica Sinica, 2015, 47(2): 212-223.
[14] LIU Xiping; CHEN Liqing; TANG Weihai; BAI Xuejun. Experience with Proactive Interference Diminishes Its Memory #br# Monitoring and Control[J]. Acta Psychologica Sinica, 2015, 47(11): 1328-1340.
[15] XIAO Hongrui;GONG Xianmin;WANG Dahua. Effect of Emotional Valence and Time Interval on the False Memory of Pictures among Older Adults[J]. Acta Psychologica Sinica, 2014, 46(7): 922-930.
Full text



Copyright © Acta Psychologica Sinica
Support by Beijing Magtech