Possession, Feeling of Ownership and The Endowment Effect

The fact that people demand much more to give up an object than they would be willing to pay to aquiare it is called the endowment effect. Endowent effect rely on the fact that people value something more once thay have established the ownership or possession right to it compared with when there no ownership or possession right.Judgement and decision mking has ignored the different between factual and subjective feelings of ownership.

Well, in the present study the endowment effect caused by subjective feeling of ownership rather than factual ownership.

The current study was conducted by Jochem Reb. The student of Singapore was used a the subjects. The study was a between participant design with four groups consisted Owners
hip and No Ownwership, Possession and No Possession. The object used was a chocolate bar that was familier to students. Assessment was that the monetary value was an independent variable and and subjective feeling of ownership was a mediator.
30 minutes before the actual study, the possession group was given a chocolate and was told to keep it before participating on an unrelated study while the ownership group was given the chocolate after prticipating on unrelated study. All participant completed a response sheet which contained a series of choices between the chocolate or amount of money.

According to results those who possess the object gave higher monetary value compared with those just own the object. The results showed that the differences in valuation that leads to endowment effect was the effect of possessing those object as well as subsequently feelings of ownership.

The reason why there was a higher monetary valuation and the feeling of endowment towards the possession group was that they were given the object to keep for certain amount of time before the experiment, mean while the ownership group was just given the object immediately at the conduction of the study. The possession group had more time to possess the object and that given them much time to attached to the object compared with the ownership group. So this explains the fact that endowment effect those not rely on the factual ownership of something, but the subjective feelings of ownership of it.