Exchange asymmetries for bads? Experimental evidence

Markus Dertwinkel-Kalt () and Katrin Köhler

European Economic Review, 2016, vol. 82, issue C, 231-241

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.

Keywords: Loss aversion; Prospect theory; Salience theory; Endowment effect (search for similar items in EconPapers)
JEL-codes: D03 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:82:y:2016:i:c:p:231-241

DOI: 10.1016/j.euroecorev.2015.12.003

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