Cultural Differences in the Endowment Effect by Grace Farnkoff and Robin Spofford

Article can be found here:

In the study “For Whom Is Parting With Possessions More Painful? Cultural Differences in the Endowment Effect,” psychologists Maddux, Yang, Falk, Adam, Adair, Endo, Carmon, and Heine examine the consequences of the association between a possession and the self. Previous studies have suggested that this association is created by simply possessing an object, and it increases the object’s perceived value because we have an automatic tendency to enhance the self. This tendency is known as the endowment effect, which is the “tendency for owners (potential sellers) to value objects more than potential buyers” value the same object. The researchers predicted that, as a result those designated as sellers would place a higher value on given object than the values given by participants designated as buyers (Maddux et al. 1910). Additionally through their research, the authors of this study examined the difference in valuation of objects between participants from Western and Eastern cultures. By comparing results across different cultures, researchers are able to account for differences in cultural valuation of objects. When researchers only focus on a single culture, they risk introducing a cultural bias into their findings.

Gilovich, Keltner, Chen, and Nisbett describe in Social Psychology how Westerners, who generally have individualistic self-construals, are more likely to exhibit self-enhancing behavior than Easterners, who have interdependent self-construals (32). Thus, as Maddux et al. predict, the difference in these self-construals would lead to a larger endowment effect in Westerners compared to Easterners, who are more likely to exhibit self-criticism behaviors. To test these predictions, the researchers conducted a series of experiments to measure if the endowment effect applied in various situations, and if there were differences between the effects in Western and Eastern participants. The participants were primarily college students from Western countries such as the United States and Canada, and East Asian countries. In the first test, Maddux et al. randomly assigned participants to be “buyers” or “sellers (owners)”. The sellers were told that they now owned a mug with their school’s logo on it, and prices were listed from $0.00 $10.00 in $0.50 increments. They were to select for each price whether they would sell the mug for the given price to the buyer, or if they would prefer to not sell the mug and keep it. Similarly, the buyers had to indicate whether they would buy the mug from the experimenter or not buy the mug at each price. So the valuation of the mug was considered to be the lowest price that the sellers would sell the mug for and the highest price that the buyers would pay for the mug. This version of the experiment indicated that the owner’s average selling price was significantly higher than the buyer’s average purchase price, thus showing evidence of the endowment effect.

The endowment effect was present for both the Eastern and Western cultures participants, but it was stronger in the Western participants. This was also reflected in the results for the second study where priming of an independent or interdependent construal led to a larger or smaller endowment effect, respectively, despite the cultural identity of the participant. Finally, in the third study, the participant’s association with an object was isolated, which resulted in a larger cultural influence on the endowment effect. This showed how participants tended to value an object more when there was an obvious association between themselves and an object. Thus, the researchers found evidence of a connection between a possession and the self, which appeared to be stronger in Western cultures than Eastern cultures.

After reviewing the researchers methods and conclusions, we feel that the experiment performed by Maddux et al. was successful in manipulating how cultural differences influence  the endowment effect. The study isolates different cultural groups in a way that eliminates the influence of confounding variables and allows them to generalize their findings. They recreated the cultural effects by priming participants with either independent or interdependent thinking, which demonstrated how these ways of thinking lead to the endowment effect. However, the only population they tested in this study was university students, so these findings should only be generalized to individuals who fall under this category. We think it would be interesting for future studies to examine how social class and age influence the endowment effect to see if there are other aspects besides culture that shape how an individual feels about a possession in relation to the self.


Gilovich, T., Keltner, D. Chen, S., & Nisbett, R. E. (2012). Social Psychology (3rd ed.). New York, NY: Norton.

Maddux, W. W., Yang, H., Falk, C., Adam, H., Adair, W., Endo, Y.,  Heine, S. J. (2010). For Whom Is Parting With Possessions More Painful? Cultural Differences in the Endowment Effect. Psychological Science, 21(12), 1910–1917. Retrieved from

This entry was posted in PS253-2016. Bookmark the permalink.

Comments are closed.