The Effect of Initial Endowments in Experimental Auctions
Jay Corrigan () and
Matthew Rousu ()
Working Papers from Kenyon College, Department of Economics
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.
Keywords: Endowment Effect; Experimental Auctions; Reciprocity; Top-Dog Effect (search for similar items in EconPapers)
JEL-codes: C91 D12 D44 (search for similar items in EconPapers)
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Journal Article: The Effect of Initial Endowments in Experimental Auctions (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ken:wpaper:0601
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