What Makes Buyers Willing to Pay More? On the Role of Touch in the Endowment Effect

Abstract

Touch has been shown to increase product valuation. Yet, the role of touch in the endowment effect – the tendency for sellers to value a good they own more than buyers do – has received little empirical attention and has been confounded with ownership, as sellers are typically handed a good and told they own it, whereas neither applies to buyers. We report an experiment in which we isolated the effect of touch in the absence of ownership. Buyers’ valuations were compared across conditions with and without touch, including a novel ‘Touch only’ modality, and touch valence (pleasant vs. unpleasant to touch), considering also buyers’ need for touch characteristics. We found that touch increased buyers’ valuations for a pleasant-to-touch good, with stronger effects for individuals high in instrumental need for touch. In addition, we provide a conceptual contribution to understanding the endowment effect and outline policy implications of varying touch availability and valence.