Analysis of Willingness to Pay for Second-hand Clothing from the Perspective of Endowment Effect

Abstract

The study analyzes the influential factors of the willingness to pay (WTP) in the used clothing market, and the endowment effect is taken into consideration. Endowment effect means that people tend to have a higher evaluation of what they own than before, and although endowment utility is a psychological behavior, it plays a very great influence in reality, and this influence cannot be ignored. This research first introduces the theoretical concept of WTA-WTP. WTA is the selling price the seller is willing to accept, while WTP is the price the buyer is willing to pay and describes which factors change the WTP. The WTP is the maximum price a consumer will pay, and the WTA is the minimum price a consumer will accept. When a consumer will trade for a good, it means that WTP equal to the WTA. The final factors influencing WTP can be divided into reference price, mental factors of purchase intention for basic physical needs, ecological concern and hedonism. The paper holds that all these factors affect buyers' willingness to pay from the perspective of endowment effect.