Learning to Like What You Have – Explaining the Endowment Effect

Bibliographic Data

ID9715491
AuthorsSteffen Huck (0000-0001-7586-7985, University College London), Georg Kirchsteiger (ECARES, Universite Libre de Bruxelles), Jörg Oechssler (0000-0003-1418-0842, Heidelberg University)
Year2005
Volume115
Issue505
Pages689-702
Publication date2005-07-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2005.01015.x
OpenAlexW1523130204
LanguageEN
Citations received13
References cited33

The endowment effect describes the fact that people demand much more to give up an object than they are willing to spend to acquire it. The existence of this effect has been documented in numerous experiments. We attempt to explain this effect by showing that evolution favors individuals whose preferences embody an endowment effect. The reason is that an endowment effect improves one's bargaining position in bilateral trades. We show that for a general class of evolutionary processes almost all individuals will have a strictly positive and finite endowment effect

Class (philosophy · Economics · Endowment · Endowment effect · Learning effect · Microeconomics · Object (grammar · Political science · Position (finance · Computer Science · Culture, Economy, and Development Studies · Economic Theory and Institutions · Experimental Behavioral Economics Studies · Finance · Law

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