Bridging the WTA-WTP gap : ownership, bargaining, and the endowment effect
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Numerous studies have shown a discrepancy between how much an individual will accept to give up an object and how much an individual will pay to acquire the same good. This discrepancy is more commonly known as the endowment effect. Although scholars have generated a vast literature demonstrating the existence of the endowment effect, the underlying psychological mechanisms that account for this phenomenon remain a source of controversy. In the following dissertation, two different psychological processes are proposed to account for the WTP/WTA discrepancy: the use of a bargaining script and cognitive engagement through object interaction. Experiment 1 explores how the use of a bargaining schema affects buyers' and sellers' valuations of a mug. Experiment 2 examines the role object interaction plays in an individual's decisions about an object's value. Each of these studies presents new data that provide novel insights into the potential psychological processes that underlie the endowment effect.