The impact of locus of control and priming on the endowment effect

Abstract

This paper demonstrates the effects of different priming conditions on the endowment effect with respect to seller and buyer roles for individuals with different loci of control. Individuals with an external locus of control process information less rationally, and they are more susceptible to external influences. In addition, the literature reports that when individuals are making a purchasing decision, they tend to perceive the value of the product as being higher because of its utility aspect because decision makers search for reasons and arguments to justify their choices (Shafir 1993; Tversky & Griffin, 1991). Therefore, this study investigates the effects of different priming conditions (utilitarian priming vs. hedonic priming) on the endowment effect according to each type of locus of control (internal vs. external). The results showed that the endowment effect was larger when externals were exposed to utilitarian priming as opposed to hedonic priming. Finally, the implications of these findings and suggestions for future research are discussed.

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