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Consumption experience, choice experience and the endowment effect

Steven J. Humphrey, Luke Lindsay and Chris Starmer
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Steven J. Humphrey: University of Osnabrück

Journal of the Economic Science Association, 2017, vol. 3, issue 2, No 2, 109-120

Abstract: Abstract We report experiments investigating how experience influences the endowment effect. Our experiments feature endowments which are bundles of unfamiliar consumption goods. We examine how a subject’s willingness to swap items from their endowment is influenced by prior experiences of tasting the goods in question and by prior experiences of choosing between them. We do not find a statistically significant endowment effect in our baseline treatment and, because of this, we are unable to test for an effect of consumption experience. We do find an endowment effect when the endowment is acquired in two instalments and, in this setting, we find some evidence that choice experience increases trading. In a follow-up experiment, we find evidence that the absence of an endowment effect in our baseline treatment is due to subjects being more willing to swap when they do not have to give up the last unit of their endowment.

Keywords: Endowment effect; Experience; Splitting effects (search for similar items in EconPapers)
JEL-codes: C91 D12 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (5)

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Working Paper: Consumption experience, choice experience and the endowment effect (2012) Downloads
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DOI: 10.1007/s40881-017-0044-z

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