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The endowment effect in the general population
[working paper]
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Wissenschaftszentrum Berlin für Sozialforschung gGmbH
Abstract We study the endowment effect and expectation-based reference points in the field leveraging the setup of the Socio-Economic Panel. Households receive a small item for taking part in the panel, and we randomly assign respondents either a towel or a notebook, which they can exchange at the end of the... view more
We study the endowment effect and expectation-based reference points in the field leveraging the setup of the Socio-Economic Panel. Households receive a small item for taking part in the panel, and we randomly assign respondents either a towel or a notebook, which they can exchange at the end of the interview. We observe a trading rate of 32 percent, consistent with an endowment effect, but no relationship with loss aversion. Manipulating expectations of the exchange opportunity, we find no support for expectation-based reference points. However, trading predicts residential mobility and is related to stock-market participation, i.e., economic decisions that entail parting with existing resources.... view less
Classification
Applied Psychology
Free Keywords
SOEP; exchange asymmetry; fieldexperiment; loss aversion; reference-dependent preferences
Document language
English
Publication Year
2022
City
Berlin
Page/Pages
16, 14 p.
Series
Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Markt und Entscheidung, Abteilung Verhalten auf Märkten, SP II 2022-204
Handle
http://hdl.handle.net/10419/267722
Status
Published Version; reviewed
Licence
Deposit Licence - No Redistribution, No Modifications