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Influence of the endowment effect on the valuation of goods. An experimental verification

Author

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  • Magdalena Gawroñska

    (Faculty of Economic Sciences, University of Warsaw)

Abstract

The article refers to the issue of the endowment effect, which acts as a mechanism that influences valuation. The paper’s main aim is to verify the endowment effect phenomenon for branded, fast-moving consumer goods. The subject of this paper also includes examining whether short-term possession, generates the endowment effect. It also studies how the possibility of using a product influences the power of the examined phenomenon. In order to verify the proposed hypothesis, an economic experiment was used. Its results were analyzed with the use of descriptive statistics and econometric methods. The study demonstrated that the endowment effect determines the perception of goods and influences their valuation.

Suggested Citation

  • Magdalena Gawroñska, 2015. "Influence of the endowment effect on the valuation of goods. An experimental verification," "e-Finanse", University of Information Technology and Management, Institute of Financial Research and Analysis, vol. 11(1), pages 86-96, August.
    • Handle: RePEc:rze:efinan:v:11:y:2015:i:1:p:75-84
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    File URL: http://e-finanse.com/artykuly_eng/303.pdf
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    More about this item

    Keywords

    endowment effect; experimental economics; auction pricing; valuation;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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