Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5066381 | European Economic Review | 2017 | 23 Pages |
Abstract
In a laboratory experiment we study whether the endowment effect exists in a social and strategic context. We employ a within-subjects design whereby participants are asked for their Willingness-to-Accept (WTA) or Willingness-to-Pay (WTP) to play a series of 2 Ã 2 games. In the second part of the experiment, we study the endowment effect in lotteries with the same payoffs as the games in the first part. Our findings provide robust evidence for the endowment effect both in games and in lotteries, with the size of the effect actually being larger in games than in lotteries. We also find that the endowment effect can partly be attributed to optimism.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Michalis Drouvelis, Joep Sonnemans,