The endowment effect in games

Michalis Drouvelis, Joep Sonnemans

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)
167 Downloads (Pure)

Abstract

In a laboratory experiment we study whether the endowment effect exists in a social and strategic context. We employ a within-subjects design whereby participants are asked for their Willingness-to-Accept (WTA) or Willingness-to-Pay (WTP) to play a series of 2x2 games. In the second part of the experiment, we study the endowment effect in lotteries with the same payoffs as the games in the first part. Our findings provide robust evidence for the endowment effect both in games and in lotteries, with the size of the effect actually being larger in games than in lotteries. We also find that the endowment effect can partly be attributed to optimism.
Original languageEnglish
Pages (from-to)240-262
Number of pages23
JournalEuropean Economic Review
Volume94
Early online date18 Mar 2017
DOIs
Publication statusPublished - May 2017

Keywords

  • Experiment
  • Endowment effect
  • 2×2 Games

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