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
Citations
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Journal ArticleDOI
Bid or Buy? Individual Shopping Traits as Predictors of Strategic Exit in On-Line Auctions
TL;DR: It is argued that impulse-buying tendencies, trait competitiveness, and hedonic need fulfillment are antecedents of strategic exit, and that hedonics need fulfillment moderates the effect of impulse- Buying tendencies on strategic exit.
Journal ArticleDOI
Managing the Urban Commons
TL;DR: The results emphasize the need for considering both individual and social incentives for group-beneficial behaviors in the specific case of the urban commons, defined as the public spaces and scenery of city neighborhoods.
Journal ArticleDOI
Reconsidering the Dual Nature of Property Rights: Personal Property and Capital in the Law and Economics of Property Rights
TL;DR: In this article, the authors reinterpreted the dual nature of property rights as a dichotomy between capital and personal property and showed that transaction costs are necessary and sufficient to explain the emergence and the form of legal institutions only in pure capitalistic societies.
Journal ArticleDOI
‘Individual Failure’ and the Analytics of Social Policy
Philip Jones,John Cullis +1 more
TL;DR: In recent years, a growing body of evidence from experimental economics and from cognitive psychology identifies a "richer" characterisation of individual behaviour as discussed by the authors, and a "broader" agenda is required when evaluating social policies.
Journal ArticleDOI
Subjective probability weighting and the discovered preference hypothesis
TL;DR: The authors showed that the elicited subjective probability weighting function converges significantly toward linearity when respondents are asked to make repeated choices and are given direct feedback after each choice, as predicted by the Discovered Preference Hypothesis (DPH).
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.
Posted Content
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.