Abstract
A hallmark result within behavioral economics is that individuals' choices are affected by current endowments. A recent theory due to Koszegi and Rabin (Quarterly Journal of Economics, 121, 1133-1165) explains such endowment effect with a model of expectations-based reference-dependent preferences. Departing from past work, we conduct complementary experiments to disentangle expectations-verified probabilistic beliefs held by subjects-from other features of endowment-such as "assignment" to a good-hence allowing us to compare the effect of expectations with that of other variations. While mere assignment can affect choices, we do not find a large role in the effect for Koszegi-Rabin expectations.
| Original language | English |
|---|---|
| Pages (from-to) | 1396-1422 |
| Number of pages | 27 |
| Journal | Journal of the European Economic Association |
| Volume | 12 |
| Issue number | 5 |
| DOIs | |
| State | Published - 1 Oct 2014 |
| Externally published | Yes |
Bibliographical note
Publisher Copyright:© 2014 by the European Economic Association.