The Trophy Effect

Christoph Bühren () and Marco Pleßner ()
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Christoph Bühren: University of Kassel

No 201125, MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: By extending a typical endowment effect experiment with the possibility to win the endow-ment in a real effort contest, we found two enforcing effects that led to a complete market failure. Subjects who won the item in the competition had an extremely high willingness to accept (trophy effect). By contrast, subjects who were not successful had an extremely low willingness to pay for the same item (reverse trophy effect). We disentangle the different components of the trophy effect, compare it to similar experiments, and discuss its important economic implications.

Pages: 17 pages
Date: 2011
New Economics Papers: this item is included in nep-cbe and nep-exp
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https://www.uni-marburg.de/en/fb02/research-groups ... /25-2011_buehren.pdf First version, 2011 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201125

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