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Article
Publication date: 6 May 2021

Tae-Hyung Pyo, JaeHwan Kwon, Thomas Gruca and Dhananjay Nayakankuppam

The endowment effect is arguably one of the most robust phenomena documented in economics, behavioral decision theory and consumer research. However, the endowment effect

Abstract

Purpose

The endowment effect is arguably one of the most robust phenomena documented in economics, behavioral decision theory and consumer research. However, the endowment effect has traditionally been studied as a fairly static phenomenon at the transactional level of analysis.

Design/methodology/approach

This paper documents this “contagious” endowment effect using lab experiments and such field data as eBay transactions and discuss the managerial implication of these findings.

Findings

This study suggests that the endowment effect is not limited to the level of the specific object, but can manifest itself with the more abstract class of objects to which a specific object happens to belong.

Research limitations/implications

A logical next step would be to examine the boundary conditions – how similar does the subsequent object have to be for the endowment effect to transfer over to it? A related aspect would be whether there are boundary conditions arising from the quality of the endowment.

Practical implications

The effects reported here probably underlie the success of the many types of “bait and switch” schemes that have been used by the more unsavory type of marketer. As such, these findings might have implications for policy in the area of consumer protection.

Originality/value

This paper argues for and presents evidence consistent with the notion that the endowment effect is dynamic and can be transferred from one transaction to another and refer to this generalization of the endowment effect to other, similar products as “contagious endowment.”

Details

European Journal of Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 10 July 2017

Khalid Ballouli, Jason Reese and Brandon Brown

Although current literature offers support for understanding sport consumer behavior from psychological and sociological perspectives, there is a lack of research that…

Abstract

Purpose

Although current literature offers support for understanding sport consumer behavior from psychological and sociological perspectives, there is a lack of research that examines the effect of one’s emotional response to team outcomes on subsequent economic decisions. The purpose of this paper is to bridge this gap by studying how emotional responses to sport events moderate a typical endowment bias in the secondary ticket market.

Design/methodology/approach

This research comprised a 3×2×2 between-participants design with emotional state (positive, negative, and neutral), role (seller, buyer), and fan identification (high, low) as the three factors. Prospect theory and social identity theory guided hypothesis development whereby it was proposed that, depending on the affective response of study participants to positive, negative, or neutral publicity concerning the team, team identification would impact the transaction function (buyers vs sellers) on price values for tickets to a future event.

Findings

Findings revealed an interaction effect of emotions and team identification on the endowment effect to the extent that bargaining gaps between sellers and buyers increased or decreased depending on mood states and levels of identification with the team.

Originality/value

This study adds to the literature on emotions and the key role they play in effecting pricing decisions and consumer behavior, especially given fan identification is such a significant area of study with numerous implications for sport business and management.

Details

Sport, Business and Management: An International Journal, vol. 7 no. 3
Type: Research Article
ISSN: 2042-678X

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Abstract

Details

Handbook of Microsimulation Modelling
Type: Book
ISBN: 978-1-78350-570-8

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Article
Publication date: 6 April 2021

Hyunju Shin and Riza Casidy

In managing hierarchical loyalty programs (HLP), firms often use a reward point expiration and status demotion policy to reduce financial liability and to encourage repeat…

Abstract

Purpose

In managing hierarchical loyalty programs (HLP), firms often use a reward point expiration and status demotion policy to reduce financial liability and to encourage repeat purchases. This study aims to examine how point expiration and status demotion policies affect customer patronage, the role of extension strategies in mitigating the negative effects of these policies on customers and the moderating role of status endowment in the effect of point expiration on customers patronage following status demotion experience.

Design/methodology/approach

Three experiments were conducted using the hotel industry as the context. The hypothesized relationships were tested using ANOVA and a serial moderated mediation analysis using SPSS PROCESS Macro.

Findings

Customers subjected to reward point expiration exhibited a higher level of anger and perceived severity of the problem than those subjected to status demotion in HLP. Consequently, when customers experienced both point expiration and status demotion, the point extension strategy rather than the status extension strategy was found to be a more effective remedy for reducing perceived unfairness, although there was no change in the level of patronage reduction between the two extension strategies. Importantly, the effect of point expiration on patronage reduction was stronger among endowed-status customers than earned-status customers, serially driven by heightened feelings of embarrassment and perceived unfairness.

Originality/value

The study adds to the existing literature on HLP by comparing the effects of point expiration and status demotion on customer patronage with practical insights for HLP managers.

Details

Journal of Services Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0887-6045

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Article
Publication date: 17 September 2018

Thi Kieu Van Tran, Ehsan Elahi, Liqin Zhang, Van Huyen Bui, Quang Trung Pham, Thuy Duong Tran, Thi Lien Ta and Munawar Hassan

The purpose of this paper is to investigate the determinants of the gender gap in the gross value of rice yield in Vietnam.

Abstract

Purpose

The purpose of this paper is to investigate the determinants of the gender gap in the gross value of rice yield in Vietnam.

Design/methodology/approach

A panel data set of 12 provinces of Vietnam from 2010 to 2014 was used, collected from the Vietnam access to resources household survey. To measure the gender gap in the gross value of rice yield, two-stage least squares and Blinder – Oaxaca decomposition methods were used.

Findings

The gross value of rice productivity of male-headed households was 10.3 percent higher than that of female-headed households. The gender gap in rice productivity is caused by the endowment and structural effects; the endowment effect explained 53 percent of the gender gap in rice productivity and the structural effect 42 percent.

Practical implications

In order to reduce the gender gap and improve the gross value of rice yield, the following policies are suggested: female education and access to institutional services (extension and credit) should be improved and future research is needed to determine the reasons for gender discrimination in the agricultural production system.

Originality/value

The findings suggest that the difference in the gross value of rice yield between male- and female-headed households were mainly caused by endowments and returns from those endowments.

Details

International Journal of Social Economics, vol. 46 no. 2
Type: Research Article
ISSN: 0306-8293

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Book part
Publication date: 16 January 2014

Sascha Füllbrunn and Ernan Haruvy

We investigate the implications of the misalignment between manager and shareholder interests and the effects of initial ownership stakes and reinvestment of unpaid…

Abstract

Purpose

We investigate the implications of the misalignment between manager and shareholder interests and the effects of initial ownership stakes and reinvestment of unpaid dividends on managerial self-dealing.

Methodology

We collect and analyze data from controlled laboratory experiments with an experimental setting which captures the role of ownership in managerial considerations.

Findings

We see the emergence of both investor-aligned outcomes and managerial self-dealing outcomes. We find that increasing managers’ initial endowment of shares makes it harder for managers to coordinate on an outcome and lowers return on investment. Moreover, allowing managers to reinvest unpaid dividends results in a transfer of wealth to management.

Research limitations

The results and the conclusions are drawn upon data from the particular setting we investigate. Generalizing them beyond the specific setting should be done with caution.

Practical implications

Higher managerial ownership stake means that managers have a greater incentive to reward shareholders, but we find that it may also imply a more difficult coordination problem between managers – sometimes to the detriment of shareholders.

Originality

This study is the first to consider the direct relationship between managers’ portfolios and voting decisions regarding dividends and investment levels.

Details

Experiments in Financial Economics
Type: Book
ISBN: 978-1-78350-141-0

Keywords

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Article
Publication date: 13 February 2019

Scott A. Thompson, James M. Loveland and Katherine E. Loveland

The purpose of this paper is to investigate the competing effects of brand community participation, which should enhance loyalty to both the brand and to already-owned…

Abstract

Purpose

The purpose of this paper is to investigate the competing effects of brand community participation, which should enhance loyalty to both the brand and to already-owned products, against switching costs, which should make consumers sensitive about the financial costs associated with new products.

Design/methodology/approach

Using the participation and weekly adoption data from 7,411 members in two brand communities and one product category forum over a six-month period, switching costs were computed for each member using 10 years of product release and pricing data.

Findings

Consistent with prior research, switching costs had a significant effect on reducing product adoption. Brand community participation also had a significant effect on overcoming switching costs. However, these main effects were qualified by an interaction, such that the most active participants were more likely to buy the new product when switching costs were higher.

Originality/value

Most importantly, these findings provide unique insights into financial switching costs and demonstrate ways in which brand community participation provides a way to mitigate switching costs for consumers who would most be affected by them.

Details

Journal of Product & Brand Management, vol. 28 no. 2
Type: Research Article
ISSN: 1061-0421

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Book part
Publication date: 4 April 2016

Louis P. Cain and Brooks A. Kaiser

At the beginning of the 20th century, three intertwined ambitions drove federal legislation over wildlife and biodiversity: establishment of multiple-use federal lands…

Abstract

At the beginning of the 20th century, three intertwined ambitions drove federal legislation over wildlife and biodiversity: establishment of multiple-use federal lands, the economic development of natural resources, and the maintenance of option values. We examine this federal intervention in natural resource use by analyzing roll call votes over the past century with a Random Utility Model (Manski, 1977) and conclude that economics mattered. So did ideology, but not uniformly. After World War II, the pro-environment vote which had been conservative shifted to being liberal. All these votes involved decisions regarding public land that reallocated the returns to users by changing the asset’s physical character or its usage rights. We suggest that long-term consequences affecting current resource allocations arose from disparities between broadly dispersed benefits and locally concentrated socioeconomic and geophysical (spatial) costs. We show that a primary intent of public land management has become to preserve multiple-use option values and identify important factors in computing those option values. We do this by demonstrating how the willingness to forego current benefits for future ones depends on the community’s resource endowments. These endowments are defined not only in terms of users’ current wealth accumulation but also from their expected ability to extract utility from natural resources over time.

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Article
Publication date: 8 August 2018

Arash Riasi, Zvi Schwartz and Chih-Chien Chen

This paper aims to demonstrate how hospitality management research could benefit from the propositional style of theorizing, and how this approach could expand the scope…

Abstract

Purpose

This paper aims to demonstrate how hospitality management research could benefit from the propositional style of theorizing, and how this approach could expand the scope of research in the discipline.

Design/methodology/approach

Developing new theories could provide unique insights and broaden the scope of research in hospitality management. To illustrate the power of proposition-based theorizing, this methodology is applied to the hotel cancellation policies domain.

Findings

Using the proposition-based theorizing in the context of cancellation policies, this study provides several propositions that could have broad implications for future research.

Originality/value

The contribution of this paper is threefold. First, the potential benefit of the proposition-based theorizing in the revenue management context of cancellation policies is demonstrated. Second, the theoretical frameworks and insights from the product return policy literature that could enrich future studies on hotel cancellation policies are introduced. Finally, this study conjectures on these theories’ relevance to hotel cancellation policies and consequently on their potential contribution to the scholarly discourse.

Details

International Journal of Contemporary Hospitality Management, vol. 30 no. 11
Type: Research Article
ISSN: 0959-6119

Keywords

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Article
Publication date: 30 July 2018

Yir-Hueih Luh and Min-Fang Wei

The Old Farmer Pension Program (OFPP) represents Taiwan’s long-standing efforts aiming at improving farm household income and well-being; however, how effective the…

Abstract

Purpose

The Old Farmer Pension Program (OFPP) represents Taiwan’s long-standing efforts aiming at improving farm household income and well-being; however, how effective the pension program is in terms of achieving the policy agenda has remained unclear. The paper aims to discuss this issue.

Design/methodology/approach

Based on data drawn from the Survey of Family Income and Expenditure during 1999–2013, two identification strategies are used to examine the effect of OFPP. First the authors apply the Blinder-Oaxaca decomposition to address the concern if the program reaches the socially/economically disadvantaged farm households. The second identification strategy involves using the static and dynamic decomposition approaches to identify the major factors contributing to farm household income inequality and the redistribution role of the OFPP.

Findings

Results from the Blinder-Oaxaca decomposition indicate that about 60 percent of the income gap can be eliminated if the pension recipients’ socio-economic characteristics are the same as the non-recipient group, suggesting it is the disadvantaged group that receives the old farmer pension. Moreover, the results suggest the significant contributions of household investments in health and human capital as well as diversification toward nonfarm activities, to income inequality among Taiwan’s farm households. Results from the dynamic decomposition suggest that the first-wave adjustment of the OFPP enlarges farm household income inequality, the following two waves of adjustment, however, plays an equalizing role.

Originality/value

This study adds to the literature by providing a methodological refinement promoting the view that it calls for the use of the dynamic (change) decomposition framework to investigate the inequality-enlarging or inequality-equalizing role each income determinant plays.

Details

China Agricultural Economic Review, vol. 11 no. 1
Type: Research Article
ISSN: 1756-137X

Keywords

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