Resource title

Learning to Like What You Have: Explaining the Endowment Effect

Resource image

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Resource description

The endowment effect describes the fact that people demand much more to give up an object than they are willing to spend to acquire it. The existence of this effect has been documented in numerous exper- iments. We attempt to explain this effect by showing that evolution favors individuals whose preferences embody an endowment effect. The reason is that an endowment effect improves one`s bargaining position in bilateral trades. We show that for a general class of evolutionary processes strictly positive endowment effects will survive in the long run.

Resource author

Steffen Huck, Georg Kirchsteiger, Jörg Oechssler

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/22833

Resource license

Adapt according to the presented license agreement and reference the original author.