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Learning to like what you have - explaining the endowment effect Author info | Abstract | Publisher info | Download info | Related research | Statistics Steffen Huck
Georg Kirchsteiger
Jörg Oechssler
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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 strictly positive endowment effects will survive in the long run. Copyright 2005 Royal Economic Society.
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Article provided by Royal Economic Society in its journal The Economic Journal .
Volume (Year): 115 (2005)
Issue (Month): 505 (07)
Pages: 689-702
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Handle: RePEc:ecj:econjl:v:115:y:2005:i:505:p:689-702Contact details of provider: Web page: http://www.res.org.uk/ More information through EDIRC
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Paper Steffen Huck & Georg Kirchsteiger & Jörg Oechssler, 2003.
"Learning to Like What You Have - Explaining the Endowment Effect ,"
Bonn Econ Discussion Papers
bgse5_2003, University of Bonn, Germany.
[Downloadable!] Steffen Huck & Georg Kirchsteiger & Joerg Oechssler, 1997.
"Learning to Like What You Have - Explaining the Endowment Effect ,"
Game Theory and Information
9702001, EconWPA, revised 15 May 1997.
[Downloadable!] S. Huck & G. Kirchsteiger & J. Oechssler, .
"Learning to Like What You Have -Explaining the Endowment Effect- ,"
Sonderforschungsbereich 373
1997-38, Humboldt Universitaet Berlin.
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Sonderforschungsbereich 373
1996-13, Humboldt Universitaet Berlin.
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