Abstract

When asked to give up an item, people often demand a much higher price than what it is actually worth to them. This is the Endowment Effect Although numerous marketing literature on the endowment effect have investigated into how ownership is associated with information processing, very few have considered the effects of prior-product experiences on the cognitive process. In this research, we study how positive and negative product experiences influence consumers’ information processing and interpretation. Study 1 provides preliminary evidence that both ownership and experience influences the recall of different types of information. Study two not only replicates the finding of study one but also extends the implication of study one by showing that both ownership and product experience affects interpretation of ambiguous information. The findings will contribute the consumer market by providing different patterns of information protocol between sellers and buyers and the influences of prior experiences.

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