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Reconsidering the effect of market experience on the “endowment effect”
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SYSNO ASEP 0351612 Document Type J - Journal Article R&D Document Type Journal Article Subsidiary J Článek ve WOS Title Reconsidering the effect of market experience on the “endowment effect” Author(s) Engelmann, Dirk (NHU-N) RID
Hollard, G. (FR)Source Title Econometrica. - : Wiley - ISSN 0012-9682
Roč. 78, č. 6 (2010), s. 2005-2019Number of pages 15 s. Language eng - English Country GB - United Kingdom Keywords endowment effect ; exchange asymmetry ; market experience Subject RIV AH - Economics CEZ AV0Z70850503 - NHU-N (2005-2011) UT WOS 000284964500007 EID SCOPUS 78650055310 DOI 10.3982/ECTA8424 Annotation Simple exchange experiments have revealed that participants trade their endowment less frequently than standard demand theory would predict. List (2003a) found that the most experienced dealers acting in a well functioning market are not subject to this exchange asymmetry, suggesting that a significant amount of market experience is required to overcome it. To understand this market-experience effect, we introduce a distinction between two types of uncertainty—choice uncertainty and trade uncertainty—both of which could lead to exchange asymmetry. We conjecture that trade uncertainty is most important for exchange asymmetry. To test this conjecture, we design an experiment where the two treatments impact differently on trade uncertainty, while controlling for choice uncertainty. Workplace Economics Institute Contact Tomáš Pavela, pavela@cerge-ei.cz, Tel.: 224 005 122 Year of Publishing 2011
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