Abstract
The manner in which an item is attained affects the perceived value of that item by the owner. Previous research has shown that personal attachment (Shu et al. 2011), self-made products (Norton et al. 2012), and hard work (Festinger, 1957) all influence how much owners value items. I devised a lab experiment in which students from Northwestern College performed an unrelated test before receiving a hot drink of their choice. Participants were then asked to offer their willingness to pay for their drinks. The experiment differs from previous research in that the work being done is unrelated to the product being evaluated. In addition, all participants in the treatment group performed the same amount of work. The findings of the experiment show that participants that failed the test had a willingness to pay of $0.85 lower than the control group. In the other hand, participants that passed the test had a willingness to pay of $0.85 higher than the control group. I suggest that participants that felt like they earned their drinks valued it higher than those that did not feel like they earned their drink.
Included in
Earning Rewards and the Endowment Effect: Evidence from a Lab Experiment
The manner in which an item is attained affects the perceived value of that item by the owner. Previous research has shown that personal attachment (Shu et al. 2011), self-made products (Norton et al. 2012), and hard work (Festinger, 1957) all influence how much owners value items. I devised a lab experiment in which students from Northwestern College performed an unrelated test before receiving a hot drink of their choice. Participants were then asked to offer their willingness to pay for their drinks. The experiment differs from previous research in that the work being done is unrelated to the product being evaluated. In addition, all participants in the treatment group performed the same amount of work. The findings of the experiment show that participants that failed the test had a willingness to pay of $0.85 lower than the control group. In the other hand, participants that passed the test had a willingness to pay of $0.85 higher than the control group. I suggest that participants that felt like they earned their drinks valued it higher than those that did not feel like they earned their drink.