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The Trophy Effect

Author

Listed:
  • Christoph Bühren

    () (University of Kassel)

  • Marco Pleßner

    ()

Abstract

By extending a typical endowment effect experiment with the possibility to win the endow-ment in a real effort contest, we found two enforcing effects that led to a complete market failure. Subjects who won the item in the competition had an extremely high willingness to accept (trophy effect). By contrast, subjects who were not successful had an extremely low willingness to pay for the same item (reverse trophy effect). We disentangle the different components of the trophy effect, compare it to similar experiments, and discuss its important economic implications.

Suggested Citation

  • Christoph Bühren & Marco Pleßner, 2011. "The Trophy Effect," MAGKS Papers on Economics 201125, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  • Handle: RePEc:mar:magkse:201125
    as

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    File URL: http://www.uni-marburg.de/fb02/makro/forschung/magkspapers/25-2011_buehren.pdf
    File Function: First version, 2011
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    References listed on IDEAS

    as
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