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Willingness to Accept, Willingness to Pay, and Loss Aversion / Jonathan Chapman, Mark Dean, Pietro Ortoleva, Erik Snowberg, Colin Camerer.
- Format:
- Book
- Author/Creator:
- Chapman, Jonathan.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w30836.
- NBER working paper series no. w30836
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2023.
- Summary:
- We use four incentivized representative surveys to study the endowment effect for lotteries in 4,000 U.S. adults. We replicate the standard finding of an endowment effect--the divergence between Willingness to Accept (WTA) and Willingness to Pay (WTP), but document three new findings. First, we find little evidence that the endowment effect is related to loss aversion for risky prospects, counter to predictions of popular theories in economics. Second, WTA and WTP not only diverge, but are, at best, weakly correlated. Third, WTA and WTP strongly relate to other aspects of risk preferences. The structure of these behaviors points to different theories of the endowment effect.
- Notes:
- Print version record
- January 2023.
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