Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5066611 | European Economic Review | 2016 | 11 Pages |
Abstract
This study provides the first incentivized test of exchange asymmetries for unpleasant items, the so-called bads. While prospect theory predicts an endowment effect for goods and bads, attention-based theories predict an endowment effect for goods, but a reverse exchange asymmetry (that is, a particularly high willingness to switch) for bads. The investigation of exchange asymmetries for bads is a key element to distinguish between the validity of loss aversion- and attention-based theories. As we find a strong endowment effect for bads, our results speak in favor of prospect theory.
Related Topics
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Authors
Markus Dertwinkel-Kalt, Katrin Köhler,