The endowment effect and emotions: possession trumps passion

Our emotions can exert a powerful influence on our judgments. Decades of psychological research bears witness to the influence of mood on a variety of processes, with mood being treated as a single dimension ranging from good to bad. This scheme, however, does not reflect the diversity of human feeling as conceived by either lay people or psychologists who specialize in emotion, and recent research investigating the impact of emotion on judgment has demonstrated that this scheme is too simple to account for the effects of affect on judgment. A variety of findings have shown that different emotions have differing effects on judgments and decisions, on measures as diverse as subjective probability (DeSteno et al, 2004), risk (Lerner & Keltner, 2001), and judgments of monetary value (Lerner, Small, & Loewenstein, 2004). The Appraisal Tendency Framework attempts to explain these findings, in part by invoking the motivational goals associated with specific emotions in the appraisal literature. Despite the prominent role of goals in the appraisal literature and in the ATF, there has been no attempt to measure the operation of goals in the paradigms where emotions affect judgment. This dissertation attempted to replicate previous research implicating emotion-induce goals as driving the effects of sadness and disgust on the endowment effect. Importantly, the current study also attempted to measure the activation of these goals, testing a mediational model where emotions activate goals, and those goals drive the effect on judgment. However, despite adequate power, successful manipulation of emotions, and a significant endowment effect, the relationship between the specific emotions and value judgments did not emerge. The proposed intermediate relationships between emotions and goals, and goals and prices, were not confirmed either, though this may have been due to a lack of internal consistency in the goal measures. A meta analysis of the effect of sadness or negative mood on the endowment effect indicated affect as a reliable moderator of the endowment effect, but also a significant level of heterogeneity among reported findings. More research is needed to determine when and how emotion influences the effect of ownership on value.Ph.D.Includes bibliographical references (p. 65-70)by Jeffrey Thomas Vietr