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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An introduction to rights
Abstract: Part I. The First Expansionary Era: 1. The prehistory of rights 2. The rights of man: The Enlightenment 3. 'Mischievous nonsense'? 4. The nineteenth century: Consolidation and retrenchment 5. The conceptual neighborhood of rights: Wesley Newcomb Hohfeld Part II. The Second Expansionary Era: 6. The universal declaration and a revolt against utilitarianism 7. The nature of rights: 'choice' theory and 'interest' theory 8. A right to do wrong? Two conceptions of moral rights 9. The pressure of consequentialism 10. What is interference? 11. The future of rights 12. Conclusion.
Journal ArticleDOI
Why Do IPO Underwriters Allocate Extra Shares when They Expect to Buy Them Back
TL;DR: In this paper, the authors argue that, when there is weak demand, it can be optimal for the underwriter to oversell an issue and take a naked short position, and that the issuing firm benefits from a higher expected offer price.
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New Explanation for the Wtp/Wta Disparity (A)
Catherine L. Kling,Jinhua Zhao +1 more
TL;DR: The authors proposed a new explanation for the WTP/WTA disparity in experiments and surveys, arguing that uncertainty, irreversibility and limited learning opportunities can generate commitment costs, driving a wedge between WTP and WTA.
Journal ArticleDOI
Can the neuroeconomics revolution revolutionize psychiatry
TL;DR: Recent evidence from neuroeconomics and psychiatry is reviewed in support of applying economic concepts such as risk/uncertainty preference, time preference and social preference to psychiatric research to improve diagnostic classification, prevention and therapy.
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.