BELSS Journal Club Milan

I will present my research at the BELSS journal club on Wednesday, May 13, 2026 at 5:00pm in 4-E4-SR03.

Dissonance-Driven Rationalization and the Endowment Effect

The endowment effect is the tendency for an owner (potential seller) to value a good more than a non-owner (potential buyer). It influences consumer behavior, pricing, and decision-making in markets and everyday life. Scholars have proposed many explanations for the effect, including loss aversion, a tendency to incorporate owned objects into one’s sense of self, cognitive processing differences between owners and non-owners, and market dynamics. Here, a new explanation is advanced that conceptualizes the endowment effect as a form of rationalization similar to how people rationalize the choices they make. After choosing, people feel dissonance about their selection’s downsides. So, they downplay those flaws and see the outcome more positively. Recent research suggests that this process does not actually require a person to actively choose, but merely to accept the outcome. The current research explores the possibility that this process of rationalization rooted in dissonance reduction could also contribute to the endowment effect. Specifically, owners rationalize their possessions, enhancing their perceived value, a process that does not occur among non-owners. The article reviews the literature from this perspective and experimentally tests derived predictions.