This paper presents evidence on the role of the endowment effect in shaping the risk-taking behavior of entrepreneurs, and how the potential of losing their firms lead them to take higher risks. This study uses an experimental design with 466 entrepreneurs in Cali, Colombia. Results show that...

A new explanation of loss aversion and the endowment effect is proposed. The model is based on the uncertain values of goods. The key element is that decision makers consider potential new knowledge about the goods they evaluate, in particular in situations when the seller may have more...