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The extended self, product valuation, and the endowment effect

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Abstract

Various explanations have been proposed to account for discrepancies in product valuation, pertaining particularly to the buyer-seller valuation gap called the endowment effect. Previous research has examined the roles of loss sensitivity, strategic responding, differences between buyers and sellers in information processing, self-enhancement, and psychological ownership as causes of the endowment effect. This article presents a conceptual perspective based on the theory of the extended self that integrates previously proposed mechanisms for the endowment effect. The self-extension perspective generates novel predictions about possible moderators of the endowment effect. Further, the self-extension perspective also raises questions for product valuation in general. By integrating previous research and posing new questions, the self-extension perspective provides a new base for the advancement of research on product valuation.

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Notes

  1. In a point echoed by Weaver and Frederick (2012), Casey (1995) observes that buyer-driven WTP-WTA gaps betray the limitation that conceptualizing the “endowment effect” as a reluctance to sell has in describing all valuation gaps.

  2. Thank you to an anonymous reviewer for bringing this up.

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  1. Sam M. Walton College of Business, University of Arkansas, Fayetteville, AR, USA

    Daniel Villanova

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Villanova, D. The extended self, product valuation, and the endowment effect. AMS Rev 9, 357–371 (2019). https://doi.org/10.1007/s13162-018-0132-0

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