When is Life Like a Box of Chocolates? Providing Multiple Units of a Good Attenuates the Endowment Effect



Previous experimental studies of the endowment effect have examined situations in which people encounter only a single unit of a good (e.g., one chocolate).  We contrast single-unit treatments with multiple-unit treatments in which participants encounter several units of a good (e.g., five chocolates).We observe standard endowment effects with single units but little or no endowment effect with multiple units.  Importantly, endowment effects arise consistently for single unit treatments – even as the definition of a unit is markedly altered.  For instance, participants holding one chocolate show an endowment effect, but so do participants holding one box of (many) chocolates. The effect of multiples on the endowment effect holds even when the multiple units are not identical. Our data suggest that multiple units activate a more "balanced" thought process than units do.
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Dr. S. Puntoni