Experimental tests of the endowment effect

Robert Franciosi, Roland Michelitsch and Vernon Smith ()
Authors registered in the RePEc Author Service: Praveen Kujal

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: The discrepancy between WTA and WTP is supposed to be a manifestation of the endowment effect (KKT). The discrepancy between the average WTA-WTP disappears in the sense of statistical significance (Shogren et. at.) in settings with repeated interactions. In this paper we reexamine the KKT experimental procedures for identifying an endowment effect for consumer goods. No evidence of income or role effects is found. We show that even though the discrepancy between WTA-WTP diminishes undertrading can still persist in markets.

Keywords: Willingness; to; Accept; Willingness; to; Pay; Undertrading; Endowment; Effect (search for similar items in EconPapers)
Date: 1994-06
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Citations: View citations in EconPapers (1)

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Journal Article: Experimental tests of the endowment effect (1996)
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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:2915

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