Book ChapterDOI
Experimental Tests of the Endowment Effect and the Coase Theorem
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In this paper, the Coase theorem predicts that about half the mugs will trade, but observed volume is always significantly less than the predicted volume, suggesting that transactions costs cannot explain the undertrading for consumption goods.Abstract:
Contrary to theoretical expectations, measures of willingness to accept greatly exceed measures of willingness to pay. This paper reports several experiments that demonstrate that this "endowment effect" persists even in market settings with opportunities to learn. Consumption objects (e.g., coffee mugs) are randomly given to half the subjects in an experiment. Markets for the mugs are then conducted. The Coase theorem predicts that about half the mugs will trade, but observed volume is always significantly less. When markets for "induced-value" tokens are conducted, the predicted volume is observed, suggesting that transactions costs cannot explain the undertrading for consumption goods.read more
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Measuring Consumer Willingness to Pay at the Point of Purchase
Klaus Wertenbroch,Bernd Skiera +1 more
TL;DR: In this article, the authors present an empirical comparison of several market research techniques for measuring consumers' willingness to pay (WTP) in estimating demand for private and public goods and in designing optimal price schedules.
Journal ArticleDOI
Feelings and Consumer Decision Making: The Appraisal-Tendency Framework
TL;DR: The Appraisal-Tendency Framework (ATF) as discussed by the authors was proposed as a basis for predicting the influence of specific emotions on consumer decision-making, and it has been used to predict consumer judgments and choices.
Journal Article
Prospect Theory In The Wild: Evidence From The Field
TL;DR: In this paper, the authors describe 10 regularities in natural occurring data that are anomalies for expected utility theory but can all be explained by three simple elements of prospect theory: loss aversion, reflection effects, and nonlinear weighting of probability.
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Resolving Differences in Willingness to Pay and Willingness to Accept: Reply
Jason F. Shogren,Dermot J. Hayes +1 more
TL;DR: This paper showed that even though the mean WTP and WTA bids for market goods with close substitutes converge after market experience, the endowment effect might still be alive and well, albeit at statisti-cally insignificant levels.
Journal ArticleDOI
The Effect of Mere Touch on Perceived Ownership
Joann Peck,Suzanne B. Shu +1 more
TL;DR: This paper found that merely touching an object results in an increase in perceived ownership of that object and that perceived ownership can also be increased through touch for legal owners, or sellers of an object.
References
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Book ChapterDOI
Prospect theory: an analysis of decision under risk
Daniel Kahneman,Amos Tversky +1 more
TL;DR: In this paper, the authors present a critique of expected utility theory as a descriptive model of decision making under risk, and develop an alternative model, called prospect theory, in which value is assigned to gains and losses rather than to final assets and in which probabilities are replaced by decision weights.
Journal ArticleDOI
Loss Aversion in Riskless Choice: A Reference-Dependent Model
Amos Tversky,Daniel Kahneman +1 more
TL;DR: In this article, the authors present a reference-dependent theory of consumer choice, which explains such effects by a deformation of indifference curves about the reference point, in which losses and disadvantages have greater impact on preferences than gains and advantages.
Journal ArticleDOI
Toward a positive theory of consumer choice
TL;DR: The economic theory of the consumer is a combination of positive and normative theories as discussed by the authors, which describes how consumers should choose, but it is also described how they do choose, and in certain well-defined situations many consumers act in a manner that is inconsistent with economic theory.
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Fairness as a Constraint on Profit Seeking: Entitlements in the Market
TL;DR: In customer or labor markets, it is acceptable for a firm to raise prices (or cut wages) when profits are threatened, and to maintain prices when costs diminish as mentioned in this paper, and several market anomalies are explained by assuming that these standards of fairness influence the behavior of firms.
Journal ArticleDOI
De gustibus non est disputandum
George J. Stigler,Gary S. Becker +1 more
TL;DR: In this paper, the Notre collegue Christophe Longuet nous offre une traduction inedite de cet article canonique precedee d'une presentation, en tout point remarquable, vous sera certainement tres utile.