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The endowment effect in games

Michalis Drouvelis () and Joep Sonnemans ()

European Economic Review, 2017, vol. 94, issue C, 240-262

Abstract: In a laboratory experiment we study whether the endowment effect exists in a social and strategic context. We employ a within-subjects design whereby participants are asked for their Willingness-to-Accept (WTA) or Willingness-to-Pay (WTP) to play a series of 2 × 2 games. In the second part of the experiment, we study the endowment effect in lotteries with the same payoffs as the games in the first part. Our findings provide robust evidence for the endowment effect both in games and in lotteries, with the size of the effect actually being larger in games than in lotteries. We also find that the endowment effect can partly be attributed to optimism.

Keywords: Experiment; Endowment effect; 2×2 Games (search for similar items in EconPapers)
Date: 2017
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Working Paper: The Endowment Effect in Games (2015) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:94:y:2017:i:c:p:240-262

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