The Endowment Effect in the General Population

Dietmar Fehr and Dorothea Kübler

No 353, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: We study the endowment effect and expectation-based reference points in the field leveraging the setup of the Socio-Economic Panel. Households receive a small item for taking part in the panel, and we randomly assign respondents either a towel or a notebook, which they can exchange at the end of the interview. We observe a trading rate of 32 percent, consistent with an endowment effect, but no relationship with loss aversion. Manipulating expectations of the exchange opportunity, we find no support for expectation-based reference points. However, trading predicts residential mobility and is related to stock-market participation, i.e., economic decisions that entail parting with existing resources.

Keywords: exchange asymmetry; reference-dependent preferences; loss aversion; field experiment; SOEP (search for similar items in EconPapers)
JEL-codes: C93 D84 D91 (search for similar items in EconPapers)
Date: 2022-12-22
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: The Endowment Effect in the General Population (2022)
Working Paper: The endowment effect in the general population (2022)
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