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Reversing the endowment effect by empowering buyers and sellers
Based on economics, psychology and marketing, sellers value goods more than buyers.
Explore the power of a potential host, that is.
The authors predict that feeling strong can reverse this effect, making buyers more valuable to the goods than sellers.
Design/method: The author manipulated power to assess the impact on valuation of three different products (
Keychain, gift card and iPhone case).
They also evaluated the participants\' Good-Bye (money)
This is the loss, received the money (the good)
This is a gain for sellers (buyers).
Findings: The feeling of power reduces the price of the seller, but the buyer increases.
It is essential that the authors observe the donation effect, but only in the case of low power.
When the participants have a high level of power, this effect is reversed, and the buyer\'s value of the goods in the transaction is higher than that of the seller.
Process data shows that powerful buyers and sellers focus on what they get compared to powerless buyers and sellers, not what they lose.
Research limitations/impacts: the authors relate the power structure to the endowment effect, indicating that the former can moderate the latter.
Of course, the donation effect is good.
But there are also host and border conditions that need to be considered.
Actual impact: The results suggest that the market may be clear, buyers value consumer goods more than sellers, so buyers may accept the seller\'s offer.
Originality/value: The author is the first person to link power literature to the donation effect.
They also showed a possible host.
Establish a donation effect.