Egocentric empathy gaps between owners and buyers: Misperceptions of the endowment effect

In 5 studies, the authors examined people's perceptions of the endowment ef fect, or the tendency to value an object more once one owns it. In the 1st 2 studies, the authors documented egocentric empathy gaps between owners an d buyers regarding the endowment effect: Both owners and buyers overestimat ed the similarity between their own valuation of a commodity and the valuat ion of people in the other role. The next 2 studies showed that these empat hy gaps may lead to reduced earnings in a market setting. The final study s howed that egocentric empathy gaps stem partly from people's misprediction of what their own valuation would be if they were in the other role.