4.15 Feelings-as-Information Theory

Schwarz (2012)

  • Also known affect as information hypothesis

  • The logic of feeling

Endowment effect

Endowment effect is not the result of loss aversion, but rather fear of getting a bad deal (i.e., being a sucker in the market) (Weaver and Frederick 2012). More specifically, people will have a salient reference price when they sell their products (e.g., could be market price). Hence, the price with which he originally paid for the products does not matter much.

References

Schwarz, Norbert. 2012. “Feelings-as-Information Theory.” In, 289–308. SAGE Publications Ltd. https://doi.org/10.4135/9781446249215.n15.
Weaver, Ray, and Shane Frederick. 2012. “A Reference Price Theory of the Endowment Effect.” Journal of Marketing Research 49 (5): 696–707. https://doi.org/10.1509/jmr.09.0103.