A comparison of the effect of retail purchase and direct marketing on the endowment effect



This article reports on a study comparing the effect of the retail and direct marketing channels of delivery on the endowment effect. The results demonstrated the endowment effect for both retail and direct marketing channels of product delivery. In addition, in the direct marketing channel, the endowment effect was strengthened by the physical, tangible possession of products at the point of product receipt compared to its virtual possession value at the point of purchase. In the retail channel of delivery, confirming consumer expectation with the possession of the product at the point of purchase resulted in the strengthening of the endowment effect compared to the unexpected out-of-stock retail situation. Contrary to expectations, the duration of the product possession did not affect product valuation. Managerial implications are discussed. © 2006 Wiley Periodicals, Inc.