Salience in Experimental Tests of the Endowment Effect

Pedro Bordalo; Nicola  Gennaioli; Andrei Shleifer

doi:10.1257/aer.102.3.47

Salience in Experimental Tests of the Endowment Effect

Pedro Bordalo, Nicola Gennaioli, Andrei Shleifer

Department of Economics

Research output: Contribution to journal › Article

Abstract

We provide a novel account of experimental evidence for the endowment effect using the salience mechanism (Bordalo, Gennaioli, and Shleifer, 2011). The two-stage procedure implemented in experiments implies that the endowed good and other goods are evaluated in different contexts. We describe conditions under which the standard effect occurs, but also account for recent evidence such as a reverse endowment effect for bads and a role for reference prices in modulating the WTA-WTP gap.

Original language	English
Pages (from-to)	47-52
Journal	American Economic Review
Volume	102
Issue number	3
DOIs	https://doi.org/10.1257/aer.102.3.47
Publication status	Published - May 2012

Keywords

Papers and Proceedings

Access to Document

10.1257/aer.102.3.47

http://www.aeaweb.org/articles.php?doi=10.1257/aer.102.3.47

Cite this

@article{8585a139d74246c2b6164aa919b3b759,

title = "Salience in Experimental Tests of the Endowment Effect",

abstract = "We provide a novel account of experimental evidence for the endowment effect using the salience mechanism (Bordalo, Gennaioli, and Shleifer, 2011). The two-stage procedure implemented in experiments implies that the endowed good and other goods are evaluated in different contexts. We describe conditions under which the standard effect occurs, but also account for recent evidence such as a reverse endowment effect for bads and a role for reference prices in modulating the WTA-WTP gap.",

keywords = "Papers and Proceedings",

author = "Pedro Bordalo and Nicola Gennaioli and Andrei Shleifer",

year = "2012",

month = may,

doi = "10.1257/aer.102.3.47",

language = "English",

volume = "102",

pages = "47--52",

journal = "American Economic Review",

issn = "0002-8282",

publisher = "American Economic Association",

number = "3",

}

TY - JOUR

T1 - Salience in Experimental Tests of the Endowment Effect

AU - Bordalo, Pedro

AU - Gennaioli, Nicola

AU - Shleifer, Andrei

PY - 2012/5

Y1 - 2012/5

N2 - We provide a novel account of experimental evidence for the endowment effect using the salience mechanism (Bordalo, Gennaioli, and Shleifer, 2011). The two-stage procedure implemented in experiments implies that the endowed good and other goods are evaluated in different contexts. We describe conditions under which the standard effect occurs, but also account for recent evidence such as a reverse endowment effect for bads and a role for reference prices in modulating the WTA-WTP gap.

AB - We provide a novel account of experimental evidence for the endowment effect using the salience mechanism (Bordalo, Gennaioli, and Shleifer, 2011). The two-stage procedure implemented in experiments implies that the endowed good and other goods are evaluated in different contexts. We describe conditions under which the standard effect occurs, but also account for recent evidence such as a reverse endowment effect for bads and a role for reference prices in modulating the WTA-WTP gap.

KW - Papers and Proceedings

U2 - 10.1257/aer.102.3.47

DO - 10.1257/aer.102.3.47

M3 - Article

SN - 0002-8282

VL - 102

SP - 47

EP - 52

JO - American Economic Review

JF - American Economic Review

IS - 3

ER -