The Impact of Loss Aversion and Endowment Effect on Self, Gender and Childrens Identity

Abstract

This paper will be examining the effect of endowment effect and loss aversion on individuals through the lenses of self, gender and age, i.e. children, respectively. When examining the endowment effect on self-enhancing by an example of shopping, loss aversion and the endowment effect is found to be more intense to an individual when one is more conscious of self-threat (i.e. when prices are higher). Through the lenses of gender, there is a lack of evidence of whether loss aversion is more effective to one gender. However, there are quite a few studies that point to the fact that loss aversion has a relatively more negative impact on female, vice versa, ceteris paribus. In the situation of children, quite a lot studies have proved that endowment effect will not work on children unless someone lead them to focus on themselves, however, children will be obviously affected by loss aversion.