A Culture-by-Context Analysis of Endowment Effects

Matthias S. GobelUniversity College London
Tiffanie OngUniversity College London
Adam J. L. HarrisUniversity College London

Abstract

The endowment effect describes people’s tendency to ask for more money when selling objects than they are willing to pay when buying these objects. Previous research found that Asian participants showed smaller endowment effects than Western participants. These results were explained by culture-specific self-beliefs being transferred onto the endowed object. Yet, Asian self-concepts are not only more interdependent, but also more situation-contingent than Western self-concepts. Thus, we predicted cultural differences in endowment effects to depend on social contexts. In two studies, we asked participants to imagine being either the owner or the buyer of a coffee mug, and to imagine using this mug in either a public or private context. Assessing participants’ monetary value of the mug, we found that Asians showed endowment effects in private but not in public contexts. In contrast, Westerners showed endowment effects across both social contexts. We discuss possible mechanisms that may underlie these findings.

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