Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Series Vol. 26 , 13 September 2023
* Author to whom correspondence should be addressed.
This paper mainly focuses on the endowment effect and uses qualitative analysis and literature review to discuss and explain the endowment effect, and analyze the application of the endowment effect in sales, stock, and management. Through these three applications, we can have a good understanding of how the endowment effect works in our lives, which unconsciously influences a lot of our decisions. For some people, such as investors, the endowment effect influences them to make more correct and rational decisions. This paper also mentions some ways to suppress the endowment effect when making decisions. So in short, the endowment effect is a very common emotional bias, which will be explained in the following article.
the endowment effect, application, marketing, management, stock
1. Andreas Furche (2006), Evidence of the Endowment Effect in Stock Market Order Placement, P151-152
2. Hammak, J., & Brown Jr, G. M. (1974). Waterfowl and wetlands: toward bioeconomic analysis. Resources for the Future. Inc., Washington, DC, USA.
3. Knetsch, J.L. (1990), Experimental Tests of the Endowment Effect and the Coase Theorem,” Journal of Political Economy 98, P1329-1336, P1342-1343
4. Rank-Christman, T. (2016). " Hello my name is…": marketplace (mis) identification and consumption response (Doctoral dissertation, Rutgers University-Graduate School-Newark).
5. Itzkowitz, J. (2020), A Classroom Experience to Introduce Behavioral Finance and the Endowment Effect, P5
6. Kettle, K. L., & Häubl, G. (2011). The signature effect: Signing influences consumption-related behavior by priming self-identity. Journal of Consumer Research, 38(3), 474-489.
7. The Endowment Effect, Management study guide, accessed on February 22, 2023. https://www.managementstudyguide.com/endowment-effect.htm
8. Furche, A., & Johnstone, D. (2006). Evidence of the endowment effect in stock market order placement. The Journal of Behavioral Finance, 7(3), 145-154.
9. Liu, J., Huang, S., Wang, W., Li, D., & Deng, X. (2021). An incentive mechanism based on endowment effect facing social welfare in Crowdsensing. Peer-to-Peer Networking and Applications, 14(6), 3929-3945.
10. Müller, S., & Stegmaier, J. (2020). Why is there resistance to works councils in Germany? An economic perspective. Economic and Industrial Democracy, 41(3), 540-561.
11. Harcourt, M., Gall, G., Wilkinson, A., Croucher, R., & Lam, H. (2020). Using the endowment effect to explain managerial resistance towards codetermination: Implications for employment relations from the German case. Human Resource Management Journal, 30(1), 149-163
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License. Authors who publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open Access Instruction).