The role of emotions in the endowment effect

Chien Huang Lin, Shih Chieh Chuang, Danny T. Kao, Chaang Yung Kung

Research output: Contribution to journalArticlepeer-review

35 Scopus citations

Abstract

This paper argues that the endowment effect - the tendency for minimum selling price to exceed maximum buying price for a particular object - might be minimized when a negative emotion is induced. The findings from two experiments on 400 participants support this hypothesis: the endowment effect only occurs when participants are induced to feel happy, and is absent when people are induced to feel sadness. Thus, the importance of emotional states is highlighted.

Original languageEnglish
Pages (from-to)589-597
Number of pages9
JournalJournal of Economic Psychology
Volume27
Issue number4
DOIs
StatePublished - Aug 2006

Keywords

  • Emotion
  • Endowment effect
  • Value
  • Willingness to accept (WTA)
  • Willingness to pay (WTP)

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