Abstract
This study examines behavioural biases affecting consumer decision-making through a series of scenario-based experiments conducted among university students. This research emphasizes the endowment effect, quasi-endowment, and status quo bias, together with connected behavioural patterns like loss aversion, reference dependence, and the zero-price effect. Using an experimental survey-based design, 161 students (86 Sellers and 75 Buyers) participated in scenarios involving hypothetical physical goods, experiential items, subscriptions, environmental valuation, and repair or replacement decisions. Participants were divided into Sellers (Owners) and Buyers (Non-Owners) to measure valuation asymmetries through willingness-to-accept (WTA) and willingness-to-pay (WTP).
Key experiments included hypothetical questions related to the BHU key-ring, autographed books, and concert tickets. Results consistently demonstrated the endowment effect- sellers demanded disproportionately higher compensation for owned items (e.g., WTA ₹397.97 vs WTP ₹72.62 for key rings), while buyers’ valuations remained lower. Status quo bias was evident, with participants preferring existing possessions over identical alternatives, and quasi-endowment effects emerged when temporary ownership or experiential trials increased perceived value. Environmental and lifestyle scenarios reinforced loss aversion, as participants required greater compensation to tolerate negative conditions than they were willing to pay for improvements. Repair and replacement choices highlighted emotional attachment and familiarity, with individuals preferring to retain or repair personal items rather than accept economically equivalent replacements.
Overall, the study provides robust empirical evidence that behavioural biases systematically influence valuation and choice, contradicting standard economic assumptions of rationality. These outcomes demonstrate the significance of including psychological perspectives in economic analysis and enrich the behavioural economics literature with context-specific evidence. The research highlights that ownership- real, symbolic, or temporary profoundly shapes human decision-making, producing predictable deviations from classical rational choice theory.
Keywords: Behavioural Economics; Endowment Effect; Loss Aversion; Status Quo Bias; Reference Dependence; WTP–WTA Gap; Mental Accounting; Psychological Ownership; Decision-Making.
JEL CODES: C91, C93, D03.