Salience in Experimental Tests of the Endowment Effect

Bordalo, Pedro, Gennaioli, Nicola and Shleifer, Andrei (2012) Salience in Experimental Tests of the Endowment Effect. American Economic Review, 102 (3). pp. 47-52.


We provide a novel account of experimental evidence for the endowment effect using the salience mechanism (Bordalo, Gennaioli, and Shleifer, 2011). The two-stage procedure implemented in experiments implies that the endowed good and other goods are evaluated in different contexts. We describe conditions under which the standard effect occurs, but also account for recent evidence such as a reverse endowment effect for bads and a role for reference prices in modulating the WTA-WTP gap.

Item Type: Article
Keywords: finance
Subject(s): Finance
Date Deposited: 11 Jul 2016 14:49
Last Modified: 22 Feb 2017 18:25
Funders: not applicable

Actions (login required)

Edit View Edit View