The Endowment Effect in the General Population

Willingness to Accept, Willingness to Pay, and Loss Aversion

“…While it is tempting to hypothesize that the difference between this finding and ours is driven by the use of lotteries versus physical objects in the endowment effect task, more recent work suggests this is unlikely to be the case. Fehr and Kübler (2022), in work initiated after our initial working paper, find evidence consistent with our findings 1 and 3 in a representative sample of the German population. They show that a binary, exchange-based proxy for having an endowment effect is unrelated to two measures of loss aversion for risky prospects based on choices over hypothetical lotteries.…”