Assessing Endowment Effect in Different Cooperative Settings

Those who are endowed with certain assets will demand higher compensation to give it up than they would have been willing to pay to obtain it initially. This disequilibrium is known as the endowment effect. Current research on endowment effect mainly focused on influential factors that manipulate the magnitude of endowment effect on individuals, yet this study centered on the occurrence of endowment under group settings, drawing different cooperative status and assessing the existence of the effect. By exploiting a 2-by-2 between-subject design on 51 participants, the experiment verified the endowment effect and discovered that the effect was neutralized under cooperative group settings. Theoretical explanations interpreted the result using the in-group generosity within Asian cultures, yet to which extent the cultural factor had influenced the participants in cooperative group was unknown.