Dupont, Dominique Y. and Lee, Gabriel S. (January 2001) The Endowment Effect, Status Quo Bias and Loss Aversion: Rational Alternative Explanation. Former Series > Working Paper Series > IHS Economics Series 92
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Abstract
Abstract: The endowment effect, status quo bias, and loss aversion are robust and well documented results from experimental psychology. They introduce a wedge between the prices at which one is willing to sell or buy a good. The objective of this paper is to address this wedge. We show that the presence of asymmetric information in a rational-agent framework can account for the endowment effect, status quo bias and loss aversion as well as psychology-based explanations proposed in the past.;
Item Type: | IHS Series |
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Keywords: | 'Endowment effect' 'Status quo bias' 'Loss aversion' 'Asymmetric information' 'Bid/ask spread' |
Classification Codes (e.g. JEL): | D81, D82, G22 |
Date Deposited: | 26 Sep 2014 10:37 |
Last Modified: | 19 Sep 2024 13:20 |
ISBN: | 1605-7996 |
URI: | https://irihs.ihs.ac.at/id/eprint/1320 |