Background
Psychologists first noted the difference between consumers WTP and WTA as early as the 1960s (Coombs, Bezembinder and Goode, 1967, Slovic and Lichtenstein, 1968). The term endowment effect however was first explicitly coined by the economist Richard Thaler (1980) in reference to the under-weighting of opportunity costs as well as the inertia introduced into a consumer's choice processes when goods included in their endowment become more highly valued than goods that are not. In the years that followed, extensive investigations into the endowment effect have been conducted producing a wealth of interesting empirical and theoretical findings (Hoffman and Spitzer, 1993 for a review).
Read more about this topic: Endowment Effect
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