Operations, Information and Decisions Papers

Document Type

Journal Article

Date of this Version

6-12-2008

Publication Source

Cell Press

Volume

58

Issue

5

Start Page

814

Last Page

822

DOI

10.1016/j.neuron.2008.05.018

Abstract

The “endowment effect” refers to the tendency to place greater value on items that one owns—an anomaly that violates the reference-independence assumption of rational choice theories. We investigated neural antecedents of the endowment effect in an event-related functional magnetic resonance imaging (fMRI) study. During scanning, 24 subjects considered six products paired with 18 different prices under buying, choosing, or selling conditions. Subjects showed greater nucleus accumbens (NAcc) activation for preferred products across buy and sell conditions combined, but greater mesial prefrontal cortex (MPFC) activation in response to low prices when buying versus selling. During selling, right insular activation for preferred products predicted individual differences in susceptibility to the endowment effect. These findings are consistent with a reference-dependent account in which ownership increases value by enhancing the salience of the possible loss of preferred products.

Author Keywords

Keywords

SYSBIO, SYSNEURO

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Date Posted: 27 November 2017

This document has been peer reviewed.