I'm reading about Endowment Effect on Wikipedia.

One of the ways of stating it seems to be

People's maximum willingness to pay (WTP) to acquire an object is typically lower than the least amount they are willing to accept (WTA)

There is a long list of explanations on the page, a lot of them attributing it to psychological factors, but I was wondering if it could be a product of rational reasoning that when you have owned a an object, you have had time to inspect it and use it in various ways. On the other hand, when you have to buy it, that assurance of quality isn't present, and hence the difference between the value.

I was wondering if this reasoning could be a valid explanation or not, and if it can be then if it has been already suggested as an explanation.

  • $\begingroup$ Welcome to Psychology.SE. Please be aware that as indicated in the Wikipedia article, some have questioned the effect's existence, and therefore it can be seen as pseudoscience. To me, if it does exist, your hypothesis could be a valid explanation, but it could equally be not valid. You may know the product and it's quality and yet you may still pay less than you would accept in payment yourself for the same product, especially if you are buying to sell on. $\endgroup$ Jun 20 '19 at 11:33
  • $\begingroup$ Supply and demand also comes into play in economics. $\endgroup$ Jun 20 '19 at 11:39
  • $\begingroup$ Note that the control group would have had the same amount of time to inspect or use the object, so this reflects a pre-existing bias. $\endgroup$
    – Arnon Weinberg
    Jun 28 '19 at 15:22