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
Name letter preferences are not merely mere exposure: Implicit egotism as self-regulation.
John Jones,John Jones,Brett W. Pelham,Brett W. Pelham,Matthew C. Mirenberg,Matthew C. Mirenberg,John J. Hetts,John J. Hetts +7 more
TL;DR: In this paper, the authors argue that implicit egotism is best conceptualized as the product of unconscious self-regulation processes rather than a result of mere exposure, and show that people prefer the letters in their own names to letters that are not in their names.
Journal ArticleDOI
Coupling social attention to the self forms a network for personal significance
TL;DR: The data show that assignment of personal social significance affects perceptual matching by coupling internal self-representations to brain regions modulating attentional responses to external stimuli.
Journal ArticleDOI
The possessive self as a barrier to conflict resolution: effects of mere ownership, process accountability, and self-concept clarity on competitive cognitions and behavior.
TL;DR: In this article, the authors propose that people have difficulty managing conflict because they quickly develop ownership of arguments and positions they use in the dispute, and that these arguments become part of their extended self-concept, and any opposition or counterargumentation therefore becomes an ego-threat.
Journal ArticleDOI
Exchange asymmetries incorrectly interpreted as evidence of endowment effect theory and prospect theory
Charles R. Plott,Kathryn Zeiler +1 more
TL;DR: In this paper, the authors experimentally test an alternative explanation, namely, that asymmetries are explained by classical preference theories finding influence through the experimental procedures typically used, and the results support explanations based in classical preference theory and reject endowment effect theory.
Journal ArticleDOI
The trade-off between money and travel time: A test of the theory of reference-dependent preferences
Bruno De Borger,Mogens Fosgerau +1 more
TL;DR: In this paper, a model of reference-dependent preferences based on the marginal rate of substitution at the reference-point of a reference-free utility function is proposed, which predicts a directly testable relationship among four commonly used valuation measures (willingness to pay, willingness to accept, equivalent gain and equivalent loss).
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.