Does ownership duration really matter? – Experimental study

Abstract

This study tests experimentally how ownership duration affects the value attributed to different items, like a USB memory stick or a lottery ticket. Holding the item for 2 weeks increased the value of a lottery ticket but not the value of a USB memory stick. We argue that in the case of utilitarian items (such as USB memory stick), the holding time has no effect on the value since the owner can benefit from them while they are in his possession.

Keywords:

• utilitarian item
• holding duration
• WTA

JEL Classification:

• C91
• D03

Notes

¹ New Israeli Shekels. The exchange rate at the time of the experiment was USD 1 to NIS 3.5.

² Participants were asked to bring the lottery ticket and USB with them to class 2 weeks after receiving them (the size and shape of the USB was identical to a credit card can be put it in a handbag or pocket).

³ This effect describes the additional utility (or disutility) associated with delayed consumption of desirable (or undesirable) outcomes.