The Endowment Effect and Beliefs About the Market.

ABSTRACT: The endowment effect occurs when people assign a higher value to an item they own than to the same item when they do not own it, and this effect is often taken to reflect an ownership-induced change in the intrinsic value people assign to the object. However recent evidence shows that valuations made by buyers and sellers are influenced by market prices provided for the individual products, suggesting a role for beliefs about the markets. Here we elicit individuals' beliefs about whole distributions of market prices, enabling us to quantify whether or not a given transaction constitutes a "good deal" and to demonstrate how an endowment effect may reflect such considerations. In a meta-analysis and three laboratory experiments, we show for the first time that ownership has no effect on beli

SUBMITTER: Achtypi E 

PROVIDER: S-EPMC7983076 | biostudies-literature | 2021 Jan

REPOSITORIES: biostudies-literature