The Impact Of Retrieval Order On Endowment Effect And Its’Development Through Human Life

Endowment effect is one of the most important elements of decision making, which means that people valued higher when the object was their owns than is not theirs, that is to say, one has the ownership or not of an object would have an effect on value assessment. The present paper was based on Preference-as-Memory, and was guided by Query Theory, we carried out three experiments, illuminating the psychology of sellers and buyers; applying the paradigm of retrieval-induced forgetting to investigate the underlying mechanism of endowment effect; exploring the characteristic of different ages on endowment effect.Experiment1explored how different retrieval sequence influenced endowment effect. There were three kinds of directions, including non-directed retrieval sequence, natural retrieval sequence and reversed retrieval sequence. The results showed that sellers and buyers in the former two conditions were identical in terms of content, number, order of the retrieved information and value assessment for the object, however, they were different from the third condition. Put it another way, there were endowment effect in the former two conditions, while this effect disappeared in the third condition.Experiment2investigated the effect of retrieval practice for different valence information on endowment effect. We applied the retrieval-induced forgetting paradigm, during the retrieval practice phase, the participants were provided with value-increasing information or value-decreasing information. Therefore, there are two conditions, including natural order and reversed order, the former contained sellers practiced value-increasing information and buyers practiced value-decreasing information, the latter contained sellers practiced value-decreasing information and buyers practiced value-increasing information. The results indicated that in the natural order condition, the value assessment for the object of sellers and buyers was sharply different, saying there was endowment effect; in the reversed condition, the endowment effect vanished.Experiment3examined the changing percent of endowment effect when retrieval-induced forgetting paradigm was applied on different-aged subjects. The results demonstrated that there was endowment effect in the natural order condition for subjects of the four groups and to our expectation, the endowment effect diminished in the reversed condition, and the most distinct change occurred on the seventeenth.According to the analysis of the results, we can make the following conclusions:Firstly, sellers initially focused on the value-increasing information, while buyers initially focused on the value-decreasing information of the same object in the dealing market; when we controlled the retrieval sequence of the participants, we could witness the appearance or disappearance of the endowment effcet.Secondly, the inhibitive mechanism underlying the endowment effect and retrieval-induced forgetting were of the same.Thirdly, in the natural retrieval sequence, participants of different ages showed endowment effect, however, when reversed the retrieval sequence, the existed endowment effect decreased, and the seventeenth reduced mostly.