Seemingly incidental emotions can influence the prices at which individuals buy and sell goods, according to a groundbreaking study by researchers at Carnegie Mellon University.
While prior research has found that people set a higher price for objects they own than they themselves would be willing to pay—which economists call the endowment effect—the Carnegie Mellon study found that people who are sad actually are willing to accept less money to sell something than they would pay for the same object. The researchers also found that when people experience disgust, both buying and selling prices fall. This multidisciplinary study will be published in the May edition of Psychological Science, the prestigious journal of the American Psychological Society.
"We’re showing for the first time that incidental emotions from one situation can exert a causal effect on economic behavior in other, ostensibly unrelated situations," said Jennifer Lerner, an assistant professor of social and decision sciences and psychology. Lerner co-authored the study with Economics Professor George Loewenstein and Deborah Small, a doctoral student in the Department of Social and Decision Sciences who soon will be joining the faculty at the Wharton School of Business at the University of Pennsylvania.
Jonathan Potts | Carnegie Mellon University
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