Arbeitspapier
Learning to like what you have: Explaining the endowment effect
The endowment effect describes the fact that people demand much more to give up an object than they are willing to spend to acquire it. The existence of this effect has been documented in numerous experiments. We attempt to explain this effect by showing that evolution favors individuals whose preferences embody an endowment effect. The reason is that an endowment effect improves one's bargaining position in bilateral trades. We show that for a general class of evolutionary processes almost all individuals will have a strictly positive and finite endowment effect.
- Language
-
Englisch
- Bibliographic citation
-
Series: SFB 373 Discussion Paper ; No. 1997,38
- Classification
-
Wirtschaft
Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
Game Theory and Bargaining Theory: Other
Microeconomics: General
- Event
-
Geistige Schöpfung
- (who)
-
Huck, Steffen
Kirchsteiger, Georg
Oechssler, Jörg
- Event
-
Veröffentlichung
- (who)
-
Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes
- (where)
-
Berlin
- (when)
-
1997
- Handle
- URN
-
urn:nbn:de:kobv:11-10064208
- Last update
- 10.03.2025, 11:41 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Huck, Steffen
- Kirchsteiger, Georg
- Oechssler, Jörg
- Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes
Time of origin
- 1997
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