Salience in Experimental Tests of the Endowment Effect

Pedro Bordalo, Nicola Gennaioli and Andrei Shleifer

No 17761, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We provide a novel account of experimental evidence for the endowment effect using the salience mechanism (Bordalo, Gennaioli, and Shleifer, 2011). The two-stage procedure implemented in experiments implies that the endowed good and other goods are evaluated in different contexts. We describe conditions under which the standard effect occurs, but also account for recent evidence such as a reverse endowment effect for bads and a role for reference prices in modulating the WTA-WTP gap.

JEL-codes: D03 D81 (search for similar items in EconPapers)
Date: 2012-01
New Economics Papers: this item is included in nep-exp and nep-upt
Note: AP CF
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Citations: View citations in EconPapers (44)

Published as Pedro Bordalo & Nicola Gennaioli & Andrei Shleifer, 2012. "Salience in Experimental Tests of the Endowment Effect," American Economic Review, American Economic Association, vol. 102(3), pages 47-52, May.

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Journal Article: Salience in Experimental Tests of the Endowment Effect (2012)
Working Paper: Salience and Experimental Tests of the Endowment Effect (2012)
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