Is endowment necessary to explain the endowment effect?

Last registered on November 13, 2017

Pre-Trial

Trial Information

General Information

Title
Is endowment necessary to explain the endowment effect?
RCT ID
AEARCTR-0002578
Initial registration date
November 12, 2017

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
November 13, 2017, 2:26 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Region

Primary Investigator

Affiliation
Southern University of Science and Technology

Other Primary Investigator(s)

Additional Trial Information

Status
In development
Start date
2017-11-14
End date
2017-11-20
Secondary IDs
D91
Abstract
This paper hypothesizes that the endowment effect has little to do with endowment—if we defined endowment as legal claim (what we call “proprietorship”). This paper hypothesizes that the endowment effect is rather the outcome of bonding or psychological attachment (what we call “ownership”). Most, if not all, the experimental work in the economics literature involve a major confound between proprietorship (legal claim) and ownership (bonding). We run the standard workhorse experimental design—viz., the exchange of mugs and pens of Monash University—while separating ownership from proprietorship. We predict: i) the endowment effect appears even when there is no proprietorship (just mere ownership); ii) the endowment effect appears in the case of proprietorship of both items—which allows us to reason that it is the result of difference in ownership; ii) the endowment effect disappears in the case of proprietorship of both items when the participants see the items simultaneously—which allows us to reason that the simultaneity has expunged the ownership effect.
External Link(s)

Registration Citation

Citation
Dong, Lu. 2017. "Is endowment necessary to explain the endowment effect?." AEA RCT Registry. November 13. https://doi.org/10.1257/rct.2578-1.0
Former Citation
Dong, Lu. 2017. "Is endowment necessary to explain the endowment effect?." AEA RCT Registry. November 13. https://www.socialscienceregistry.org/trials/2578/history/23180
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
We intend to use the standard workhorse experimental design—viz., the exchange of mugs and pens (with the same insignia)—while separating ownership from proprietorship.
Intervention (Hidden)
I intend to use the standard workhorse experimental design—viz., the exchange of mugs and pens (with the same insignia)—while separating ownership from proprietorship. I predict:

i) the endowment effect appears even when the participants possess the items as loans, i.e., there is no (legal) proprietorship (just mere ownership defined as psychological bonding);
ii) the endowment effect appears when the participants possess the items as (legal) proprietorship. This is the case because of the sequential presentation of the items where participants bond with the item that is presented first more than the item that is presented later.

These predictions should be valid even when one lets a coin toss determine which item if presented first to the participants. Further, we expect the endowment effect to vanish under both-- ownership and proprietorship—as soon as the two items are shown simultaneously to the participants.
Intervention Start Date
2017-11-15
Intervention End Date
2017-11-16

Primary Outcomes

Primary Outcomes (end points)
the rate of keeping the endowed item
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
A two-by-two treatments design: whether two items are presented simultaneously or subsequently, and whether two items are presented as loans or gift.
Experimental Design Details
Randomization Method
coin flip
Randomization Unit
experimental sessions
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
8 experimental sessions
Sample size: planned number of observations
240 individuals
Sample size (or number of clusters) by treatment arms
60 individuals per treatment
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials