Book ChapterDOI
Experimental Tests of the Endowment Effect and the Coase Theorem
Reads0
Chats0
TLDR
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
More filters
Journal ArticleDOI
Do cosmetic reporting variations affect market behavior? A laboratory study of the accounting emphasis on unavoidable costs
TL;DR: In this article, the authors conducted eight laboratory market sessions in which sellers have both opportunity costs (default redemption values from not trading) and unavoidable costs (fixed outlays that must be paid irrespective of trading).
Journal ArticleDOI
Dividends as Reference Points: A Behavioral Signaling Approach
TL;DR: Hirshleifer et al. as mentioned in this paper outline a model that features investors who are averse to dividend cuts and show that managers with strong unobservable cash earnings pay high dividends but retain enough to be likely not to fall short next period.
Journal ArticleDOI
Dissociable neural substrates for agentic versus conceptual representations of self
TL;DR: Views of the “self” as a collection of distinct mental operations distributed throughout the brain, rather than a unitary cognitive system are supported.
Journal ArticleDOI
An Experimental Investigation of the Disparity Between WTA and WTP for Lotteries
Ulrich Schmidt,Stefan Traub +1 more
TL;DR: In this article, the disparity between willingness-to-accept (WTA) and willingness to pay (WTP) for risky lotteries was investigated, and the disparity was significantly reduced when background risk was introduced.
Journal ArticleDOI
Why process matters: A social cognition perspective on economic behavior
TL;DR: In this paper, the authors advocate a social-cognitive perspective on economic behavior, aimed at revealing the psychological mechanisms that shape how people construe a particular situation, and they hope that such a perspective can contribute to theoretical and empirical integration, novel predictions, and more precise strategies to change behavior.
References
More filters
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.