The Effect of Initial Endowments in Experimental Auctions

Jay Corrigan () and Matthew Rousu

American Journal of Agricultural Economics, 2006, vol. 88, issue 2, 448-457

Abstract: We report the results of an experiment designed to test whether initial endowments affect value estimates elicited from experimental auctions. Comparing bids for one unit of a good, two units of a good, and a second unit of a good when endowed with the first unit, we find that willingness to pay for the second unit of a good is, on average, as much as 75% higher when endowed with the first unit. We go on to advance two theories that could potentially reconcile our results with neoclassical consumer theory. Copyright 2006, Oxford University Press.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:88:y:2006:i:2:p:448-457

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