IDEAS home Printed from https://ideas.repec.org/p/smo/raiswp/0318.html
   My bibliography  Save this paper

The Endowment Effect and Self-Determination as Drivers of Co-Creation Online

Author

Listed:
  • Julia M. Puaschunder

    (Columbia University, USA)

Abstract

One of the most studied behavioral economics effects is the endowment effect. If people are asked to pay for a normal good (e.g., like a mug or pen), the price they offer tends to be lower than if they are given the same good and asked for what price they are willing to sell the good. The endowment effect is believed to stem from the value imbued in possession and the expectation to hold onto the possession once a good is acquired. The psychological effect of self-determination on the motivation of people has been studied in psychology for a long time. Self-determined decisions hold positive advantages of people getting a positive boost from their own volition. Self-determined people tend to follow with through their plans and work longer and better on tasks than those who just fulfill externally-imposed goals. The endowment effect and self-determined decisions may underlie the fascination of co-creation online. Online luxury worlds have been booming in the last decade. Virtual co-creation in homepages, blogs, social online media and video self-streaming platforms has created a new source of social and monetary value as never before in the history of humankind. Social online media influencers are now one of the most prominent career choices in the upcoming generation. This paper attempts to connect the endowment effect with self-determined co-creation online effects, which appears to take the economy over by storm. The paper offers a first glimpse of the new phenomenon. Human rights online and ethical predicament in internet markets will be discussed, as well as future research avenues on the topic.

Suggested Citation

  • Julia M. Puaschunder, 2023. "The Endowment Effect and Self-Determination as Drivers of Co-Creation Online," RAIS Conference Proceedings 2022-2024 0318, Research Association for Interdisciplinary Studies.
    • Handle: RePEc:smo:raiswp:0318
    as

    Download full text from publisher

    File URL: https://rais.education/wp-content/uploads/2023/12/0318.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    2. Harbaugh, William & Krause, Catherine & Vesterlund, Lise, 2001. "Are Children Better Behaved Than Adults? Age, Experience and the Endowment Effect," Staff General Research Papers Archive 1950, Iowa State University, Department of Economics.
    3. Charles R. Plott & Kathryn Zeiler, 2007. "Exchange Asymmetries Incorrectly Interpreted as Evidence of Endowment Effect Theory and Prospect Theory?," American Economic Review, American Economic Association, vol. 97(4), pages 1449-1466, September.
    4. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1325-1348, December.
    5. Hoffman, Elizabeth & Spitzer, Matthew L., 1993. "Willingness-To-Pay vs. Willingness-To-Accept: Legal and Economic Implications," ISU General Staff Papers 199301010800001571, Iowa State University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Steven G. Medema, 2020. "The Coase Theorem at Sixty," Journal of Economic Literature, American Economic Association, vol. 58(4), pages 1045-1128, December.
    2. Brown, Thomas C. & Morrison, Mark D. & Benfield, Jacob A. & Rainbolt, Gretchen Nurse & Bell, Paul A., 2015. "Exchange asymmetry in experimental settings," Journal of Economic Behavior & Organization, Elsevier, vol. 120(C), pages 104-116.
    3. repec:cup:judgdm:v:17:y:2022:i:5:p:988-1014 is not listed on IDEAS
    4. Domenico Colucci & Chiara Franco & Vincenzo Valori, 2021. "Endowment effects at different time scenarios: the role of ownership and possession," Discussion Papers 2021/279, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    5. Andrea Isoni & Graham Loomes & Robert Sugden, 2011. "The Willingness to Pay—Willingness to Accept Gap, the "Endowment Effect," Subject Misconceptions, and Experimental Procedures for Eliciting Valuations: Comment," American Economic Review, American Economic Association, vol. 101(2), pages 991-1011, April.
    6. Jacobs Martin, 2016. "Accounting for Changing Tastes: Approaches to Explaining Unstable Individual Preferences," Review of Economics, De Gruyter, vol. 67(2), pages 121-183, August.
    7. Simon Gächter & Eric J. Johnson & Andreas Herrmann, 2022. "Individual-level loss aversion in riskless and risky choices," Theory and Decision, Springer, vol. 92(3), pages 599-624, April.
    8. repec:jdm:journl:v:17:y:2022:i:5:p:988-1014 is not listed on IDEAS
    9. Banzhaf, H. Spencer, 2016. "Constructing markets: environmental economics and the contingent valuation controversy," MPRA Paper 78814, University Library of Munich, Germany.
    10. Roth, Gerrit, 2006. "Predicting the Gap between Willingness to Accept and Willingness to Pay," Munich Dissertations in Economics 4901, University of Munich, Department of Economics.
    11. John A. List, 2004. "Neoclassical Theory Versus Prospect Theory: Evidence from the Marketplace," Econometrica, Econometric Society, vol. 72(2), pages 615-625, March.
    12. John A. List, 2006. "Using Hicksian Surplus Measures to Examine Consistency of Individual Preferences: Evidence from a Field Experiment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 115-134, March.
    13. Daniel Villanova, 2019. "The extended self, product valuation, and the endowment effect," AMS Review, Springer;Academy of Marketing Science, vol. 9(3), pages 357-371, December.
    14. M. Keith Chen & Venkat Lakshminarayanan & Laurie Santos, 2005. "The Evolution of Our Preferences: Evidence from Capuchin-Monkey Trading Behavior," Cowles Foundation Discussion Papers 1524, Cowles Foundation for Research in Economics, Yale University.
    15. Christina McGranaghan & Steven G. Otto, 2022. "Choice uncertainty and the endowment effect," Journal of Risk and Uncertainty, Springer, vol. 65(1), pages 83-104, August.
    16. Ihli, Hanna Julia & Chiputwa, Brian & Musshoff, Oliver, 2016. "Do Changing Probabilities or Payoffs in Lottery-Choice Experiments Affect Risk Preference Outcomes? Evidence from Rural Uganda," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(2), May.
    17. Min, Shi & Wang, Xiaobing & Liu, Min & Huang, Jikun, 2018. "The asymmetric response of farmers to an expected change in the price of rubber: The roles of sunk costs and path dependency," Land Use Policy, Elsevier, vol. 79(C), pages 585-594.
    18. Dertwinkel-Kalt, Markus & Köhler, Katrin, 2016. "Exchange asymmetries for bads? Experimental evidence," European Economic Review, Elsevier, vol. 82(C), pages 231-241.
    19. Heffetz, Ori, 2021. "Are reference points merely lagged beliefs over probabilities?," Journal of Economic Behavior & Organization, Elsevier, vol. 181(C), pages 252-269.
    20. Nicholas C. Barberis, 2012. "Thirty Years of Prospect Theory in Economics: A Review and Assessment," NBER Working Papers 18621, National Bureau of Economic Research, Inc.
    21. Dominic Bergers, 2021. "Individual differences in the susceptibility of biases relevant in price management: a state-of-the-art article," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(4), pages 497-528, August.
    22. Sardaro, Ruggiero & Faccilongo, Nicola & Roselli, Luigi, 2019. "Wind farms, farmland occupation and compensation: Evidences from landowners’ preferences through a stated choice survey in Italy," Energy Policy, Elsevier, vol. 133(C).

    More about this item

    Keywords

    Co-creation online; Economics; Endowment Effect; Law & Economics; Luxury; Online; Self-determined Decisions; Virtual Markets;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:smo:raiswp:0318. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Eduard David (email available below). General contact details of provider: http://rais.education/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.