New experiments on the endowment effect
1992; Elsevier BV; Volume: 13; Issue: 2 Linguagem: Inglês
10.1016/0167-4870(92)90034-5
ISSN1872-7719
AutoresGuido Ortona, Francesco Scacciati,
Tópico(s)Financial Markets and Investment Strategies
ResumoThis paper reports on some new experiments on the so-called endowment effect, i.e. the overevaluation of an asset due to possession of it. If the payoffs are high and fictitious, the effect is very strong. But if the payoffs are (relatively) high and real, the effect seems to fade away. It is argued that the endowment effect may be displaced by rational behaviour if the gains at stake are worthwhile. Two possible explanations of the effect are suggested. The first is at odds with economic rationality, while the second is not. Further experiments are required to resolve the question.
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