Explanations of the endowment effect: an integrative review

Right thalamic volume mediates impact of the dopamine beta-hydroxylase gene on the endowment effect

The endowment effect is a tendency that individuals overvalue items belonging to them relative to those items that do not. Previous studies showed a strong relation between the dopamine beta-hydroxylase (DBH) gene and the endowment effect (EE), and a link between EE and task-based functional MRI activation in multiple brain regions. However, the role of brain structure on EE remains unclear. In this study, we have explored whether regional brain volume mediate the effect of the DBH gene on EE. Results showed that rs1611115, single-nucleotide polymorphisms (SNPs) at DBH loci, were significantly associated with right thalamus volume and the endowment effect in males but not in female participants. Specifically, male DBH rs1611115 T-carriers had larger right thalamus volume compared to carriers of CC genotype and exhibited a greater endowment effect. Importantly, we found that right thalamus volume mediated the effect of rs1611115 on the endowment effect in male participants. This study demonstrated how thalamic volume plays an important mediating role between genetics and decision-making in humans.

Self-prioritization in working memory gating

Working memory (WM) involves a dynamic interplay between temporary maintenance and updating of goal-relevant information. The balance between maintenance and updating is regulated by an input-gating mechanism that determines which information should enter WM (gate opening) and which should be kept out (gate closing). We investigated whether updating and gate opening/closing are differentially sensitive to the kind of information to be encoded and maintained in WM. Specifically, since the social salience of a stimulus is known to affect cognitive performance, we investigated if self-relevant information differentially impacts maintenance, updating, or gate opening/closing. Participants first learned to associate two neutral shapes with two social labels (i.e., "you" vs. "stranger"), respectively. Subsequently they performed the reference-back paradigm, a well-established WM task that disentangles WM updating, gate opening, and gate closing. Crucially, the shapes previously associated with the self or a stranger served as target stimuli in the reference-back task. We replicated the typical finding of a repetition benefit when consecutive trials require opening the gate to WM. In Study 1 (N = 45) this advantage disappeared when self-associated stimuli were recently gated into WM and immediately needed to be replaced by stranger-associated stimuli. However, this was not replicated in a larger sample (Study 2; N = 90), where a repetition benefit always occurred on consecutive gate-opening trials. Overall, our results do not provide evidence that the self-relevance of stimuli modulates component processes of WM. We discuss possible reasons for this null finding, including the importance of continuous reinstatement and task-relevance of the shape-label associations.

The endowment effect and temporal discounting of drug and non-drug commodities

OBJECTIVES

Despite a rich history of behavioral economic research on substance use there remains a need for further exploration of behavioral mechanisms that may underlie the etiology or persistence of substance use disorder. The purpose of this study was to measure the association between delay discounting and the endowment effect in people who smoke cigarettes, use cocaine, and controls, using online crowdsourcing.

METHODS

Participants were categorized to a cocaine group (n = 36), cigarette group (n = 48), or control group (n = 47) based on recent reported drug use. Based on group, participants completed up to three delay discounting tasks (i.e., money, cigarettes and cocaine), an endowment effect task for multiple commodities, and other questionnaires.

RESULTS

Participants in the cocaine and cigarette group demonstrated an increased rate in discounting for money compared to controls. Participants in the cocaine group had a less pronounced endowment effect for beer, compared to controls, as suggested by willingness to accept less to sell beer. A significant negative association was found between endowment ratios for non-drug commodities and delay discounting for cigarettes, but not monetary or cocaine delay discounting, indicating an inconsistent relationship between the two measures.

CONCLUSIONS

These results support prior research demonstrating a relationship between cocaine and cigarette use and delay discounting and extend that work by measuring the association between delay discounting and the endowment effect. Future research should include both loss aversion and endowment effect tasks and compare their relationship with delay discounting among people that use drugs.

The art of the deal: Deciphering the endowment effect from traders' eyes

People are often reluctant to trade, a reticence attributed to the endowment effect. The prevailing account attributes the endowment effect to valuation-related bias, manifesting as sellers valuing goods more than buyers, whereas an alternative account attributes it to response-related bias, manifesting as both buyers and sellers tending to stick to the status quo. Here, by tracking and modeling eye activity of buyers and sellers during trading, we accommodate both views within an evidence-accumulation framework. We find that valuation-related bias is indexed by asymmetric attentional allocation between buyers and sellers, whereas response-related bias is indexed by arousal-linked pupillary reactivity. A deal emerges when both buyers and sellers attend to their potential gains and dilate their pupils. Our study provides preliminary evidence for our computational framework of the dynamic processes mediating the endowment effect and identifies physiological biomarkers of deal-making.

Improving the Generalizability of Behavioral Science by Using Reality Checks: A Tool for Assessing Heterogeneity in Participants' Consumership of Study Stimuli

In attempting to draw bigger conclusions, researchers in psychology open their labs to more diverse groups of people. Yet even the most far-reaching theories must be tested with specific stimuli, materials, and methodology. To the extent that a study's stimuli are familiar beyond the lab to groups of people writ large, an experiment is said to have mundane realism-a type of external validity. We propose that an experiment's stimuli will vary in their relevance to each individual participant (such as how much they consume the stimuli outside the lab) and can be assessed using a tool: reality checks. We found that accounting for a study's mundane realism, at the individual level, significantly altered a study's results-which we found to be the case in testing well-established findings in psychology and behavioral economics. Our work suggests that measuring mundane realism (in addition to creating it) is a useful way of testing effects in psychology among the participants for whom the studies' scenarios and decisions will matter most outside of the lab.

The consumers' response to product design: a narrative review

This paper reviews the research ideas around consumer response to product design. From the product side, we discuss the most significant design features preferred by average consumers, such as aesthetics and utility. And from the consumer side, we investigate the human factors influencing consumer perceptions. We present the main approaches used to measure the consumer response to product design and summarize the multiple biases that occur during the evaluation. Finally, we present in detail the most commonly used methods to analyze consumer response data and their roles in the design evaluation context. Practitioner Summary: To answer the question: What causes differences in design response? We summarise the research findings related to product design features and human factors. We highlight the biases that can emerge from the measurement approach. And discuss the most common analysis methods used for product design response information.

The single- and dual-brain mechanisms underlying the adviser's confidence expression strategy switching during influence management

Effective influence management during advice-giving requires individuals to express confidence in the advice properly and switch timely between the 'competitive' strategy and the 'defensive' strategy. However, how advisers switch between these two strategies, and whether and why there exist individual differences during this process remain elusive. We used an advice-giving game that manipulated incentive contexts (Incentivized/Non-Incentivized) to induce the adviser's confidence expression strategy switching and measured the brain activities of adviser and advisee concurrently using functional near-infrared spectroscopy (fNIRS). Behaviorally, we observed individual differences in strategy switching. Some advisers applied the 'defensive' strategy when incentivized and the 'competitive' strategy when not incentivized, while others applied the 'competitive' strategy when incentivized and the 'defensive' strategy when not incentivized. This effect was mediated by the adviser's perceived stress in each condition and was reflected by the frequencies of advice-taking in the advisees. Neurally, brain activation in the dorsolateral prefrontal cortex (DLPFC) supported strategy switching, as well as interpersonal neural synchronization (INS) in the temporoparietal junction (TPJ) that supported influence management. This two-in-one process, i.e., confidence expression strategy switching and the corresponding influence management, was linked and modulated by the strength of DLPFC-TPJ functional connectivity in the adviser. We further developed a descriptive model that contributed to understanding the adviser's strategy switching during influence management.

"Me" means more than "good": stimuli's self-relevance matters more than valence in shaping evaluative learning via the self

ABSTRACTStimuli that relate to the self tend to be better liked. The Self-Referencing (SR) task is a paradigm whereby one target categorised through the same action as self-stimuli (i.e. possessive pronouns) is preferred over an alternative target categorised through the same action as other-stimuli. Past studies on the SR showed that valence could not fully account for the observed effect. Here we explored self-relevance as a possible explanation. Across four studies (N = 567), participants selected self-relevant and self-irrelevant adjectives to be used as source stimuli in a Personal-SR task. In that task, the two classes of stimuli were paired with two fictitious brands. We measured automatic (IAT) and self-reported preferences, and identification with the brands. Experiment 1 showed that the brand paired with positive self-relevant adjectives became more positive than the one paired with positive self-irrelevant adjectives. Experiment 2 confirmed this pattern with negative adjectives, and Experiment 3 ruled out the effect of a self-serving bias in the adjectives selection. Experiment 4 showed that the brand related to negative self-relevant adjectives was preferred over the brand related to positive self-irrelevant adjectives. We discussed the implications of our results and the potential mechanisms that might explain self-driven preferences.

Loss aversion (simply) does not materialize for smaller losses

Loss aversion, the argument that losses are given more weight than gains, has been recently shown to be absent in small losses. However, a series of studies by Mrkva et al. (2020) appear to demonstrate the existence of loss aversion even for smaller losses. We re-ran Mrkva et al.’s decision tasks after removing features of the task that differentiated losses from the gains, particularly asymmetries in sizes of gains and losses, an increasing order of losses, and status quo effects. The results show that we replicate Mrkva et al.’s (2020) findings in their original paradigm with online participants, yet in five studies where gains and losses were symmetrically presented in random order (n = 2,001), we find no loss aversion for small amounts, with loss aversion surfacing very weakly only for average losses of $40 (mean λ = 1.16). We do find loss aversion for higher amounts such as $100 (mean λ = 1.54) though it is not as extreme as previously reported. Furthermore, we find weak correlation between the endowment effect and loss aversion, with the former effect existing simultaneously with no loss aversion. Thus, when items are presented symmetrically, significant loss aversion emerges only for large losses, suggesting that it cannot be argued that (all) “losses loom larger than gains.”

The endowment effect in the future: How time shapes buying and selling prices

Previous research has focused on studying the endowment effect for transactions that take place in the present. Many real-world transactions, however, are delayed into the future (i.e., people agree to buy or sell, but the actual transaction does not materialize until a later time). Here we investigate how transaction timing affects the endowment effect. In five studies, we show that the endowment effect systematically increases as transactions are delayed into the future. Specifically, buying prices significantly decrease as the transaction is delayed, while selling prices remain constant, resulting in an amplified endowment effect (Experiment 1). This pattern is not produced by a discounting of the money involved in the transaction (Experiment 2), and it holds across different types of items (Experiment 3). We also show that the phenomenon cannot be explained by sellers anticipating becoming increasingly attached to the items over time (Experiment 4). Finally, we demonstrate that this increased endowment effect in the future holds in the field, in the context of a real market and with real transactions (Experiment 5).

Decision Reversibility and Satisfaction: The Mediating Role of Counterfactual Thinking and Anticipated Regret

Purpose

Extensive research has shown that reversible decisions yield lower post-decision satisfaction than irreversible decisions. However, to date, little is known about how decision reversibility affects post-decision satisfaction. Based on regret theory, this study aimed to examine the mediating role of counterfactual thinking and anticipated regret in the association between decision reversibility and satisfaction.

Methods

In this study (130 participants), participants were randomly assigned to two personnel decision situations with reversible and irreversible decision outcomes, and all participants completed questionnaires during the process of completing the decision task. The questionnaires used included the Counterfactual Thinking for Negative Events Scale, Anticipated Regret Scale, and satisfaction questionnaire. Finally, the data were statistically analyzed using the base package in R and PROCESS 3.5.

Results

The results show that (1) Compared to irreversible decisions, reversible decisions have a significant negative impact on satisfaction. (2) Counterfactual thinking plays a mediating role between decision reversibility and satisfaction. (3) Compared with irreversible decisions, reversible decisions further lowered the level of post-decision satisfaction through the chain mediating effects of counterfactual thinking and anticipated regret.

Conclusion

People's lowered levels of post-decision satisfaction in the reversible decision condition relate to increased levels of counterfactual thinking and anticipated regret. In addition, counterfactual thinking can play a mediating role alone, indicating that this variable may be critical in understanding the mechanisms by which decision reversibility affects satisfaction. This knowledge may be used to help people optimize their decision-making behavior.

"More is not always better": Park's sweet spot theory-driven implementation strategy for viable optimal safe nurse staffing policy in practice

AIM

This paper aims to propose Park's sweet spot theory-driven implementation strategy, which makes optimal safe staffing policy really work in nursing practice.

BACKGROUND

For the last 40 years, mainstream nursing workforce research has emphasized that having more registered nurses leads to better patient outcomes, and yet staffing policies have failed to implement this crucial concept. Meanwhile, global nursing shortages have become rampant, a problem that only dilutes the skill-mix ratios in the nursing workforce. Low fertility and an aging population worldwide are then accelerating these shortages. These dire circumstances may be persisting because of unclear, unsubstantiated cost-efficiency in the nursing workforce. For this reason, there remains a dearth of well-researched evidence for a clear threshold on optimal safe staffing levels that could maximize quality of care relative to cost given limited healthcare financial budgets and which could also be fitted into each care setting. Along with that, an implementation strategy for optimal safe staffing levels is nonexistent.

SOURCES OF EVIDENCE

An implementation strategy has been developed through interdisciplinary consilience-based theory synthesis of both prospective theory and regulatory focus theory combined with Park's optimized nursing staffing (sweet spot) estimation theory.

DISCUSSION/CONCLUSIONS

A theory-driven novel implementation strategy is proposed, which functions as a nudge strategy that uses the synchronous balance of quality of care, nurse staffing, and cost. It illustrates (1) how to create shared value among patients, nurses, and stakeholders through robust evidence-based, informed shared decision-making rationales on the optimal safe nurse staffing levels and (2) how to induce stakeholders to overcome resistance to innovation and improve their nursing workforce through value chain in management science.

IMPLICATIONS FOR NURSING WORKFORCE POLICY

This novel implementation strategy may be a viable solution to mitigate the nursing shortage by leading stakeholders (1) to compete with each other (on the basis of nursing sufficiency) and (2) to competitively demonstrate the patient-centered value (patient-perceived care quality relative to cost) of their institutions.

Development of a Japanese version of the Psychological Ownership Scale

The present study addresses the need for a valid instrument for measuring dimensions of psychological ownership, including that of owned and non-owned objects, for use in the language and culture of Japan. Although the theory of psychological ownership has expanded self-extension theory, the most widely used scale of psychological ownership does not measure the extent to which one feels that it (the owned object) is a part of them. Thus, the present study aimed to develop a Japanese version of the Psychological Ownership Scale (POS-J) and examine its reliability and validity. Study 1 measured the POS-J of an owned object, finding the POS-J to have a two-factor structure (possession-self link and feeling of ownership) and its internal consistency and reliability to be adequate. Moreover, POS-J scores were positively correlated with perceived control and self-extension tendency, but not monetary value, indicating that conceptual validity was generally supported. To confirm whether the POS-J could be used for a non-owned object, Study 2 rephrased the expressions of item descriptions and examined the effect of imagining touching a non-owned object on the POS-J scores, showing that doing so increased the POS-J scores for the object. Our findings suggest that the POS-J is a reliable and valid measure of the psychological ownership of owned and non-owned objects for use in Japan.

Willingness to accept (WTA), willingness to pay (WTP), and the WTA/WTP disparity in Chinese social media platforms: Descriptive statistics and associations with personality and social media use

The amount of money individuals were willing to accept (WTA) to discontinue using prominent Chinese social media platforms (WeChat/QQ), the willingness to pay (WTP) for using these platforms, as well as WTA/WTP disparities were investigated in between-groups and within-subjects design studies to examine their existence, size, and psychological correlates in the form of personality and social media use habits. Individuals were recruited at Chinese universities in three separate surveys. For between-groups investigations, four samples were investigated: WTA and WTP samples for investigations in the context of WeChat as well as WTA and WTP samples for QQ. For within-subjects investigations, individuals completed items on WTA and WTP for WeChat/QQ, the Big Five Inventory, time spent on WeChat/QQ, and the short Bergen Social Media Addiction Scale. Two samples providing data on WeChat and QQ, respectively, were investigated. Across study designs and for both WeChat and QQ we found evidence for high WTA and comparatively low WTP scores, thus, large WTA/WTP disparities. Individual differences in the disparities were negatively associated with Openness across social media platforms. The results reveal a generally low acceptance to pay for social media use, which is important against the background of discussions on monetary payment models. Moreover, a complex interplay between individual characteristics, characteristics of the service, and how and why the service is used seems to underly WTA and the WTA/WTP disparity. Finally, methodological implications of the present results for forthcoming studies assessing valuation (WTA, WTP) in the context of social media are discussed.

How the Custom Suppresses the Endowment Effect: Exchange Paradigm in Kanak Country

In this paper, Knetsch's exchange paradigm is analyzed from the perspective of pragmatics and social norms. In this paradigm the participant, at the beginning of the experiment, receives an object from the experimenter and at the end, the same experimenter offers to exchange the received object for an equivalent object. The observed refusal to exchange is called the endowment effect. We argue that this effect comes from an implicature made by the participant about the experimenter's own expectations. The participant perceives the received item as a gift, or as a present, from the experimenter that cannot be exchanged as stipulated by the social norms of western politeness common to both the experimenter and the participant. This implicature, however, should not be produced by participants from Kanak culture for whom the perceived gift of a good will be interpreted as a first act of exchange based on gift and counter-gift. This exchange is a natural, frequent, balanced, and indispensable act for all Kanak social bonds whether private or public. Kanak people also know the French social norms that they apply in their interactions with French people living in New Caledonia. In our experiment, we show that when the exchange paradigm takes place in a French context, with a French experimenter and in French, the Kanak participant is subject to the endowment effect in the same way as a French participant. On the other hand, when the paradigm is carried out in a Kanak context, with a Kanak experimenter and in the vernacular language, or in a Kanak context that approaches the ceremonial of the custom, the endowment effect is no longer observed. The same number of Kanak participants accept or refuse to exchange the endowed item. These results, in addition to providing a new explanation for the endowment effect, highlight the great flexibility of decisions according to social-cultural context.

The Intention to Conceal Does Not Always Affect Time Perception

The display duration of stimuli is overestimated due to the increase in phasic arousal induced by the stimuli or high levels of background arousal. A previous study demonstrated that display duration of items (2 s) was overestimated when a participant attempted to conceal one of the items so as not to be detected in the concealed information test (CIT). As the time perception remained the same between the item to be concealed and the other items, the overestimation was thought to be due to the high level of background arousal under the conceal condition. Duration of 2 s may be too long to examine the phasic arousal effect induced by the concealed item. The present study conducted three online experiments with shorter durations, that is, each of three items was presented with duration of 1, 0.5, and 2 s in Experiments 1, 2, and 3, respectively. The participants were instructed to conceal one of the three items under the conceal condition and did not conceal any item in the innocent condition. The difference in time perception between the conceal and innocent conditions or between items under the conceal condition was observed in none of the three experiments. The result indicates that temporal overestimation does not occur when a participant is only concealing an object. Rather, temporal overestimation would occur only when the level of background arousal is amplified by the concealment.

Rights and Responsibilities Are Substitutable Framings That Differentially Affect Judgment

Do employers have a responsibility to treat their workers equally or do employees have a right to be treated equally? In common discourse, rights and responsibilities are often used as substitutable framings for the same event, but they may differentially shape judgment. In this investigation, we develop an experimental manipulation of rights versus responsibilities and evaluate whether framing an arrangement between two parties in terms of rights, versus responsibilities, affects people’s judgment. We found that people judged unequal distributions between two parties as less fair when framed in terms of rights than in terms of responsibilities. Furthermore, people judged a rights framing as fairer for an unequal (vs. equal) contractual agreement. Thus, a subtle framing manipulation can increase or decrease people’s sensitivity to unequal distributions. We discuss potential mechanisms for this effect and implications for behavioral law as well as the potential to nudge people’s sensitivity to inequality.

More or less of me and you: self-relevance augments the effects of item probability on stimulus prioritization

Self-relevance exerts a powerful influence on information processing. Compared to material associated with other people, personally meaningful stimuli are prioritized during decision-making. Further exploring the character of this effect, here we considered the extent to which stimulus enhancement is impacted by the frequency of self-relevant versus friend-relevant material. In a matching task, participants reported whether shape-label stimulus pairs corresponded to previously learned associations (e.g., triangle = self, square = friend). Crucially however, before the task commenced, stimulus-based expectancies were provided indicating the probability with which both self- and friend-related shapes would be encountered. The results revealed that task performance was impacted by the frequency of stimulus presentation in combination with the personal relevance of the items. When self- and friend-related shapes appeared with equal frequencies, a self-prioritization effect emerged (Expt. 1). Additionally, in both confirmatory (Expt. 2) and dis-confirmatory (Expt. 3) task contexts, stimuli that were encountered frequently (vs. infrequently) were prioritized, an effect that was most pronounced for self-relevant (vs. friend-relevant) items. Further computational analyses indicated that, in each of the reported experiments, differences in performance were underpinned by variation in the rate of information uptake, with evidence extracted more rapidly from self-relevant compared to friend-relevant stimuli. These findings advance our understanding of the emergence and origin of stimulus-prioritization effects during decisional processing.

The Endowment Effect and Beliefs About the Market

The endowment effect occurs when people assign a higher value to an item they own than to the same item when they do not own it, and this effect is often taken to reflect an ownership-induced change in the intrinsic value people assign to the object. However recent evidence shows that valuations made by buyers and sellers are influenced by market prices provided for the individual products, suggesting a role for beliefs about the markets. Here we elicit individuals’ beliefs about whole distributions of market prices, enabling us to quantify whether or not a given transaction constitutes a “good deal” and to demonstrate how an endowment effect may reflect such considerations. In a meta-analysis and three laboratory experiments, we show for the first time that ownership has no effect on beliefs about either: (a) the quality of the item or (b) the appropriate market price for the item. Instead, we show that sellers demand a price for the item that matches their beliefs about the item’s relative quality and the distribution of market prices in the market. Buyers, in contrast, offer less than what they believe the appropriate market price is. Thus, we argue that the endowment effect may largely reflect “adaptively rational” behavior on the part of both buyers and sellers (given their beliefs about relevant markets) rather than any ownership-induced bias or change in intrinsic preferences.

It's not always about me: The effects of prior beliefs and stimulus prevalence on self-other prioritisation

Although self-relevance is widely acknowledged to enhance stimulus processing, the exclusivity of this effect remains open to question. In particular, in commonly adopted experimental paradigms, the prioritisation of self-relevant (vs. other-relevant) material may reflect the operation of a task-specific strategy rather than an obligatory facet of social-cognitive functioning. By changing basic aspects of the decisional context, it may therefore be possible to generate stimulus-prioritisation effects for targets other than the self. Based on the demonstration that ownership facilitates object categorisation (i.e., self-ownership effect), here we showed that stimulus prioritisation is sensitive to prior expectations about the prevalence of forthcoming objects (owned-by-self vs. owned-by-friend) and whether these beliefs are supported during the task. Under conditions of stimulus uncertainty (i.e., no prior beliefs), replicating previous research, objects were classified more rapidly when owned-by-self compared with owned-by-friend (Experiment 1). When, however, the frequency of stimulus presentation either confirmed (Experiment 2) or disconfirmed (Experiment 3) prior expectations, stimulus prioritisation was observed for the most prevalent objects regardless of their owner. A hierarchical drift diffusion model (HDDM) analysis further revealed that decisional bias was underpinned by differences in the evidential requirements of response generation. These findings underscore the flexibility of ownership effects (i.e., stimulus prioritisation) during object processing.

'This country is OURS': The exclusionary potential of collective psychological ownership

Political campaign slogans, such as ‘Take back control of our country’ (United Kingdom Independence Party) and ‘The Netherlands ours again’ (Dutch Party for Freedom), indicate that right‐wing populism appeals to the belief that the country is ‘ours’, and therefore, ‘we’ have the exclusive right to determine what happens. We examined this sense of ownership of the country (i.e. collective psychological ownership [CPO]) with the related determination right in relation to exclusionary attitudes and voting behaviour. Among Dutch (Study 1, N = 572) and British (Study 2, N = 495) participants, we found that CPO explained anti‐immigrant and anti‐EU attitudes, and these attitudes in turn accounted for voting ‘leave’ in the 2016 Brexit referendum in the British sample (Study 2). Additionally, CPO was more strongly related to negative immigrant attitudes among right‐wing Dutch participants, whereas it was more strongly related to negative EU attitudes and voting ‘leave’ among left‐wing British participants. CPO contributes to the understanding of critical contemporary social attitudes and political behaviour.

A distributional and dynamic theory of pricing and preference

Theories that describe how people assign prices and make choices are typically based on the idea that both of these responses are derived from a common static, deterministic function used to assign utilities to options. However, preference reversals-where prices assigned to gambles conflict with preference orders elicited through binary choices-indicate that the response processes underlying these different methods of evaluation are more intricate. We address this issue by formulating a new computational model that assumes an initial bias or anchor that depends on type of price task (buying, selling, or certainty equivalents) and a stochastic evaluation accumulation process that depends on gamble attributes. To test this new model, we investigated choices and prices for a wide range of gambles and price tasks, including pricing under time pressure. In line with model predictions, we found that price distributions possessed stark skew that depended on the type of price and the attributes of gambles being considered. Prices were also sensitive to time pressure, indicating a dynamic evaluation process underlying price generation. The model out-performed prospect theory in predicting prices and additionally predicted the response times associated with these prices, which no prior model has accomplished. Finally, we show that the model successfully predicts out-of-sample choices and that its parameters allow us to fit choice response times as well. This price accumulation model therefore provides a superior account of the distributional and dynamic properties of price, leveraging process-level mechanisms to provide a more complete account of the valuation processes common across multiple methods of eliciting preference. (PsycInfo Database Record (c) 2020 APA, all rights reserved).

Beliefs About the Persistence of History in Objects and Spaces in the United States and India

Scattered evidence in the literature suggests that people may believe that non-visible traces of past events (e.g., origins, emotions, and qualities of the owner) persist over time in objects and spaces, even after the original source has been removed. To date, however, there has been no unified treatment to determine the scope and cultural consistency of this expectation. This study had four primary goals: (a) to assess how broadly participants display persistence-of-history beliefs, (b) to explore individual differences in these beliefs, (c) to examine the explanatory frameworks for these beliefs, and (d) to determine whether these beliefs were endorsed across two cultural settings. Adults in both United States ( N = 195) and India ( N = 173) evaluated a broad range of situations involving possible persistence of history. In both countries, three patterns emerged: (a) A broad range of persistence-of-history scenarios were judged to be possible, falling into two underlying thematic clusters (supernatural vs. non-supernatural); (b) paranormal beliefs predicted endorsement of items in both thematic clusters; and yet (c) most scenarios were explained using natural explanatory frameworks. Together, these results demonstrate broad endorsement of the persistence of history—across cultures, situations, and individuals—as well as substantial individual variation.

Transaction Frame Determines Preferences: Valuation of Labor by Employee and Contractor

A major concern in today's economic reality is the extent to which a sharing economy, in comparison with a traditional economy, promotes inequality. In the transformation from a traditional to a sharing economy, wage setting is replaced by contract pricing. The switch to contract trading implies that the party who carries out the labor evaluates the transaction from a buyer's rather than a seller's perspective. Drawing on psychological research on constructed and reference-dependent preferences, we predicted that the net valuation of work would decrease when the regimen involved contract trading. Three experiments (N = 1,105) eliciting work valuation under the two regimens confirmed our prediction, thus pointing to a novel factor that increases inequality.

Formulating an Ethics of Pharmaceutical Disinvestment

There is growing interest among pharmaceutical policymakers in how to "disinvest" from subsidized medicines. This is due to both the rapidly rising costs of healthcare and the increasing use of accelerated and conditional reimbursement pathways which mean that medicines are being subsidized on the basis of less robust evidence of safety and efficacy. It is crucial that disinvestment decisions are morally sound and socially legitimate, but there is currently no framework to facilitate this. We therefore reviewed the bioethics literature in order to identify ethical principles and concepts that might be relevant to pharmaceutical disinvestment decisions. This revealed a number of key ethical considerations-both procedural and substantive-that need to be considered when making pharmaceutical disinvestment decisions. These principles do not, however, provide practical guidance so we present a framework outlining how they might be applied to different types of disinvestment decisions. We also argue that, in this context, even the most rigorous ethical reasoning is likely to be overridden by moral intuitions and psychological biases and that disinvestment decisions will need to strike the right balance between respecting justifiable moral intuitions and overriding unjustifiable psychological impulses.

A Task-Based Taxonomy of Cognitive Biases for Information Visualization

Information visualization designers strive to design data displays that allow for efficient exploration, analysis, and communication of patterns in data, leading to informed decisions. Unfortunately, human judgment and decision making are imperfect and often plagued by cognitive biases. There is limited empirical research documenting how these biases affect visual data analysis activities. Existing taxonomies are organized by cognitive theories that are hard to associate with visualization tasks. Based on a survey of the literature we propose a task-based taxonomy of 154 cognitive biases organized in 7 main categories. We hope the taxonomy will help visualization researchers relate their design to the corresponding possible biases, and lead to new research that detects and addresses biased judgment and decision making in data visualization.

The relationship between endowment and ownership effects in memory across cultures

An object one owns is typically more highly valued than an equivalent object owned by another person. This endowment effect has been attributed to the aversion of loss of one's possessions (through selling), or the added value of an item due to self-association (through owning). To date, investigation of these mechanisms has been hampered by the between-subjects methodology traditionally employed to measure endowment. Over two experiments, we report a novel within-subjects method for measuring an endowment bias. In these studies, Western participants showed enhanced valuation of owned items, whereas East-Asian participants did not. This endowment bias also correlated with the ownership effect in memory (a measure of self-referential processing) in Western, but not East-Asian participants. Our results suggest that the endowment effect is partly predicated on the same factors that influence the ownership effect and that this commonality is likely linked to conceptions of ownership specifically, and self-concept more generally.

Valence and ownership: object desirability influences self-prioritization

Research has demonstrated that possession exerts a potent influence on stimulus processing, such that objects are categorized more rapidly when owned-by-self than when they belong to other people. Outstanding theoretical questions remain, however, regarding the extent of this self-prioritization effect. In particular, does ownership enhance the processing of objects regardless of their valence or is self-prioritization restricted to only desirable items? To address this issue, here we explored the speed with which participants categorized objects (i.e., desirable and undesirable posters) that ostensibly belonged to the self and a best friend. In addition, to identify the cognitive processes supporting task performance, data were submitted to a hierarchical drift-diffusion model (HDDM) analysis. The results revealed a self-prioritization effect (i.e., RT_self < RT_friend) for desirable posters that was underpinned by differences in the efficiency of stimulus processing. Specifically, decisional evidence was extracted more rapidly from self-owned posters when they were desirable than undesirable, an effect that was reversed for friend-owned posters. These findings advance understanding of when and how valence influences self-prioritization during decisional processing.

The endowment effect in the genes: An exploratory study

The endowment effect is a well-documented decision phenomenon, referring to a tendency that people price a commodity higher when selling it than when buying it. This phenomenon can be interpreted as a sort of inertia, an unwillingness to make a change, or in other words an attachment to the status-quo. People with autism dislike social interaction, and are thus probably less willing to buy and sell items and more attached to the status quo. Previous research revealed that T-carriers of a single-nucleotide polymorphism (SNP) of the dopamine beta-hydroxylase (DBH) gene, rs1611115 (C-1021T), are associated with autism and difficulty in social interaction. Therefore, rs1611115 may modulate the endowment effect. In the current study, the subjects sold and bought lotteries with various probabilities of winning money and provided saliva for genotyping. We found that T-carriers (people of CT genotype in this study) exhibited greater endowment effects compared to people of CC genotype. We discuss another two possible explanations of our results: empathy and loss aversion. This is the first attempt to research the endowment effect from the perspective of genes. The result indicates that an SNP of genes (an innate factor) can exert an observable effect on human market activities.

Valuing Facebook

In recent years, there has been a great deal of discussion of the welfare effects of digital goods, including social media. A national survey, designed to monetize the benefits of a variety of social media platforms (including Facebook, Twitter, YouTube and Instagram), found a massive disparity between willingness to pay (WTP) and willingness to accept (WTA). The sheer magnitude of this disparity reflects a ‘superendowment effect’. Social media may be Wasting Time Goods – goods on which people spend time, but for which they are not, on reflection, willing to pay much (if anything). It is also possible that in the context of the WTP question, people are giving protest answers, signaling their intense opposition to being asked to pay for something that they had formerly enjoyed for free. Their answers may be expressive, rather than reflective of actual welfare effects. At the same time, the WTA measure may also be expressive, a different form of protest, telling us little about the actual effects of social media on people's lives and experiences. It may greatly overstate those effects. In this context, there may well be a sharp disparity between conventional economic measures and actual effects on experienced well-being.

Spending too little in hard times

People's decisions to consume and save resources are critical to their wellbeing. Previous experiments find that people typically spend too much because of how they discount the future. We propose that people's motive to preserve their savings can instead cause them to spend too little in hard times. We design an economic game in which participants can store resources for the future to survive in a harsh environment. A player's income is uncertain and consumption yields diminishing returns within each day, creating tradeoffs between spending and saving. We compare participants' decisions to a heuristic that performed best in simulations. We find that participants spent too much after windfalls in income, consistent with previous research, but they also spent too little after downturns, supporting the resource preservation hypothesis. In Experiment 2, we find that by varying the income stream, the downturn effect can be isolated from the windfall effect. In Experiments 3-4, we find the same downturn effect in games with financial and political themes.

Endowment Effect: Trading for Oneself Versus Trading for Others

Prior research on the endowment effect has tended to focus on decisions made by individuals acting on their own account rather than on others’ behalf. This article reports on three experiments that modeled this “for-self” versus “for-others” distinction and measured its effects on prices. Specifically, our participants who were asked to make trading decisions for other people subsequently reported decreases in the endowment effect. We concluded that, in the context of the trading of goods, perceived ownership and differences in focus on the traded products’ positive and negative features mediated the diminished endowment effect our experiments identified.

Unpacking buyer-seller differences in valuation from experience: A cognitive modeling approach

People often indicate a higher price for an object when they own it (i.e., as sellers) than when they do not (i.e., as buyers)-a phenomenon known as the endowment effect. We develop a cognitive modeling approach to formalize, disentangle, and compare alternative psychological accounts (e.g., loss aversion, loss attention, strategic misrepresentation) of such buyer-seller differences in pricing decisions of monetary lotteries. To also be able to test possible buyer-seller differences in memory and learning, we study pricing decisions from experience, obtained with the sampling paradigm, where people learn about a lottery's payoff distribution from sequential sampling. We first formalize different accounts as models within three computational frameworks (reinforcement learning, instance-based learning theory, and cumulative prospect theory), and then fit the models to empirical selling and buying prices. In Study 1 (a reanalysis of published data with hypothetical decisions), models assuming buyer-seller differences in response bias (implementing a strategic-misrepresentation account) performed best; models assuming buyer-seller differences in choice sensitivity or memory (implementing a loss-attention account) generally fared worst. In a new experiment involving incentivized decisions (Study 2), models assuming buyer-seller differences in both outcome sensitivity (as proposed by a loss-aversion account) and response bias performed best. In both Study 1 and 2, the models implemented in cumulative prospect theory performed best. Model recovery studies validated our cognitive modeling approach, showing that the models can be distinguished rather well. In summary, our analysis supports a loss-aversion account of the endowment effect, but also reveals a substantial contribution of simple response bias.