IS THE ENDOWMENT EFFECT AN EXPECTATIONS EFFECT?
A hallmark result within behavioral economics is that individuals' choices are affected by current endowments. A recent theory due to Kőszegi and Rabin (<link href="#jeea12084-bib-0010"/>, Quarterly Journal of Economics, 121, 1133–1165) explains such endowment effect with a model of expectations-based reference-dependent preferences. Departing from past work, we conduct complementary experiments to disentangle expectations—verified probabilistic beliefs held by subjects—from other features of endowment—such as “assignment” to a good—hence allowing us to compare the effect of expectations with that of other variations. While mere assignment can affect choices, we do not find a large role in the effect for Kőszegi–Rabin expectations.
Year of publication: |
2014
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Authors: | Heffetz, Ori ; List, John A. |
Published in: |
Journal of the European Economic Association. - European Economic Association - EEA. - Vol. 12.2014, 5, p. 1396-1422
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Publisher: |
European Economic Association - EEA |
Saved in:
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