Eliciting the Endowment Effect under Assigned Ownership

TL;DR

This paper demonstrates that the endowment effect can be triggered simply by assigning ownership, showing significant increases in willingness to pay versus willingness to accept in an airline context.

Contribution

It provides experimental evidence that endowment effects can be elicited through assigned ownership without actual possession, using a large survey sample.

Findings

Endowment effect increased WTP over WTA by 15-20 times

Assigned ownership alone can generate the endowment effect

Significant results at p<0.05

Abstract

In this study we present evidence that endowment effect can be elicited merely by assigned ownership. Using Google Customer Survey, we administered a survey were participants (n=495) were randomly split into 4 groups. Each group was assigned ownership of either legroom or their ability to recline on an airline. Using this experiment setup we were able to generate endowment effect, a 15-20x (at p<0.05) increase between participant's willingness to pay (WTP) and their willingness to accept (WTA).