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The influence of involvement on the endowment effect: The moveable value function by Najam U. Saqib; Norman Frohlich; Edward Bruning is a Business, Management and Accounting article available to read on EtoBox.

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## Abstract The endowment effect is based on the loss aversion built into Prospect Theory's asymmetric value function. This paper posits that the level of consumer involvement with a decision is a moderator of the endowment effect. It is proposed that high involvement increases the slope differential between the loss and gain regions of the value function, enhancing loss aversion. The research further posits that higher involvement is accompanied by higher arousal and cognitive processing which produces stronger negativity in thoughts. The argument for these effects is discussed in the context of evolutionary theory. We conclude that consumers are more loss averse in high versus low involvement conditions.

Who reads The influence of involvement on the endowment effect: The moveable value function?

Author

Najam U. Saqib; Norman Frohlich; Edward Bruning

Publisher

Elsevier Science; Wiley (John Wiley & Sons); John Wiley and Sons Inc.; Wiley (ISSN 1057-7408)

Published

2010

Language

EN

Field

Business, Management and Accounting (Social Sciences)