Mistakes, Closure and Endowment Effect in Laboratory Experiments
In this paper, we relax the hard closure property of experiments that have been used to study endowment effect in laboratory. We study differences in benchmark environments (hard closure) and an environment that allows participants to reverse the decisions taken in the laboratory (soft closure). We find that “endowment effect” is not observed in the soft closure treatment. The procedures in our experiment allow us to circumvent the critique of altered expectations. Our results call for a careful interpretation of experiments that suggest “endowment effect” in laboratory conditions. Other implications pertain to external validity of experiments with hard closure.
|Date of creation:||Sep 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.buseco.monash.edu.au/eco/
More information through EDIRC
|Order Information:|| Web: http://www.buseco.monash.edu.au/eco/research/papers/ Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andersen, Steffen & Ertaç, Seda & Gneezy, Uri & Hoffman , Moshe & List, John A., 2011.
"Stakes Matter in Ultimatum Games,"
01-2011, Copenhagen Business School, Department of Economics.
- Lange, Andreas & Ratan, Anmol, 2010. "Multi-dimensional reference-dependent preferences in sealed-bid auctions - How (most) laboratory experiments differ from the field," Games and Economic Behavior, Elsevier, vol. 68(2), pages 634-645, March.
- Dirk Engelmann & Guillaume Hollard, 2010.
"Reconsidering the Effect of Market Experience on the “Endowment Effect”,"
Econometric Society, vol. 78(6), pages 2005-2019, November.
- Dirk Engelmann & Guillaume Hollard, 2010. "Reconsidering the Effect of Market Experience on the "Endowment Effect"," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00633557, HAL.
- John List, 2003.
"Does market experience eliminate market anomalies?,"
Natural Field Experiments
00297, The Field Experiments Website.
- John A. List, 2003. "Does Market Experience Eliminate Market Anomalies?," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 41-71, February.
- Steven D. Levitt & John A. List, 2007.
"Viewpoint: On the generalizability of lab behaviour to the field,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 40(2), pages 347-370, May.
- John List & Steven Levitt, 2007. "Viewpoint: On the generalizability of lab behaviour to the field," Artefactual Field Experiments 00001, The Field Experiments Website.
- John A. List, 2004.
"Neoclassical Theory Versus Prospect Theory: Evidence from the Marketplace,"
Econometric Society, vol. 72(2), pages 615-625, 03.
- John List, 2004. "Neoclassical theory versus prospect theory: Evidence from the marketplace," Framed Field Experiments 00174, The Field Experiments Website.
- John A. List, 2003. "Neoclassical Theory Versus Prospect Theory: Evidence from the Marketplace," NBER Working Papers 9736, National Bureau of Economic Research, Inc.
- Shlomo Benartzi & Richard H. Thaler, 1993.
"Myopic Loss Aversion and the Equity Premium Puzzle,"
NBER Working Papers
4369, National Bureau of Economic Research, Inc.
- Benartzi, Shlomo & Thaler, Richard H, 1995. "Myopic Loss Aversion and the Equity Premium Puzzle," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 73-92, February.
- Glenn W. Harrison & John A. List, 2004.
Journal of Economic Literature,
American Economic Association, vol. 42(4), pages 1009-1055, December.
- repec:feb:framed:0088 is not listed on IDEAS
- Keith M. Marzilli Ericson & Andreas Fuster, 2011. "Expectations as Endowments: Evidence on Reference-Dependent Preferences from Exchange and Valuation Experiments," The Quarterly Journal of Economics, Oxford University Press, vol. 126(4), pages 1879-1907.
- Ori Heffetz & John A. List, 2011. "Is the Endowment Effect a Reference Effect?," NBER Working Papers 16715, National Bureau of Economic Research, Inc.
- Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1325-48, December.
When requesting a correction, please mention this item's handle: RePEc:mos:moswps:2012-22. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Simon Angus)
If references are entirely missing, you can add them using this form.