Kahneman, Knetsch & Thaler (1990), Journal of Political Economy — endowment effect: Cornell mug study showed owners demand more to give up (WTA ~$5.25-$7) than buyers will pay (WTP ~$2.25-$2.87)
Summary
Claim: Kahneman, Knetsch & Thaler (1990), Journal of Political Economy — the endowment effect: owners demand more to give up a good than buyers will pay (Cornell mug study: WTA ~$5.25-$7 vs. WTP ~$2.25-$2.87). Mechanism: loss aversion / psychological ownership.
Source: Kahneman, Knetsch & Thaler (1990), JPE.
Confidence: Verified.
Why this matters for Candid: Foundation for the IKEA-effect work (Norton, Mochon & Ariely (2012), Journal of Consumer Psychology — IKEA effect: effort/co-creation raises valuation of the result ("labor leads to love") BUT ONLY WHEN TASK IS SUCCESSFULLY COMPLETED, Sarstedt, Neubert & Barth (2017), Journal of Marketing Behavior — independent conceptual replication of IKEA effect (loom bands); psychological ownership identified as the mediating mechanism). A user who configures a tool feels psychological ownership of the resulting configuration — and values it more than an equivalent non-configured offering.
Related entries
Referenced by (3)
- reference Research brief: why interactive tools deepen a business's relationship with its audience — a mechanism-level research package (June 2026) relates-to
- reference Norton, Mochon & Ariely (2012), Journal of Consumer Psychology — IKEA effect: effort/co-creation raises valuation of the result ("labor leads to love") BUT ONLY WHEN TASK IS SUCCESSFULLY COMPLETED depends-on
- rule R5 — Pair the IKEA effect with completion: only completed configurations produce psychological ownership; abandoned configurators produce frustration, not love depends-on