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Reversing the endowment effect - Can value perception of sellers be lower than the value perception of customers?

  • The endowment effect shows that selling prices are higher than buying prices (Kahneman et al. 1990). This paper wants to answer the question whether the endowment effect can be reversed and the value perception for the sellers can be lower than the one of the customers. To answer the question two studies were executed where sellers and customers were asked to tell their willingness to pay or rather their willingness to accept. The product for the studies was a wedding dance course, customers were potential participants, sellers the dance schools/ teachers offering the course. The results show that customers were willing to pay a much higher price than what sellers found was as an appropriate price. Sellers were accepting a much lower price. The endowment effect was reversed for this product. Reasons were the high involvement of the customer and the missing loss aversion on the part of the seller. However, the reasons show that it might not be possible to reverse the endowment effect for every product on the market.

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Author:Lisa-Marie Kussmaul
Advisor:Kai-Markus Müller
Document Type:Bachelor Thesis
Year of Completion:2020
Granting Institution:Hochschule Furtwangen
Release Date:2020/03/31
Tag:Selling price; Willingness to pay
Degree Program:IBW - Internationale Betriebswirtschaft
Functional area:Marketing
Licence (German):License LogoUrheberrechtlich geschützt