Is the Endowment Effect an Expectations Effect?
Ori Heffetz and
John List ()
Artefactual Field Experiments from The Field Experiments Website
A hallmark result within behavioral economics is that individuals' choices are affected by current endowments. A recent theory due to Koszegi and Rabin (2006) explains such endowment effect with a model of expectations-based reference-dependent preferences. Departing from past work, we conduct complementary experiments to disentangle expectations - verified probabilistic beliefs held by subjects - from other features of endowment - such as "assignment" to a good - hence allowing us to compare the effect of expectations with that of other variations. While mere assignment can affect choices, we do not find a large role in the effect for Koszegi-Rabin expectations.
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Journal Article: IS THE ENDOWMENT EFFECT AN EXPECTATIONS EFFECT? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:feb:artefa:00461
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