Talk:Endowment effect/Archives/2012

opposing evidence

I added opposing evidence to the endowment effect following a research essay into the phenomenon. It is fair to say that it does not receive anywhere near universal acceptance support among economists.

Not universally accepted--Isn't that fair to say about, well, everything in social science though? Exactly how much nonacceptance are we talking here, a lot or a little? The majority of experimentalists, at least, certainly accept the existence of the effect itself--indeed, it is routinely described as one of the most robust empirical findings in behavioral economics--the remaining "controversy," if you like, is the question of which theoretical framework best accounts for the data. That's very different from questioning whether there is an effect at all.

I'm currently working on a brief cross-disciplinary paper on endowment effect, although my own academic background is in psychology, so when I finish it I'll try to expand on this article a bit. In particular I'll review collaborative experimental work between economics and psychologists. I'll certainly preserve the section on its status among neoclassical economists--in fact, I'd like to see that expanded a bit if you wouldn't mind. It all seems rather vague and dodgy (e.g., it mentions a "more robust study" but neglects to explain a single detail about what makes it more robust). The blurb at the end about substitution effects is especially unhelpful. No explanation, no citation, not even a wiki link? Come on... Jake987722 (talk) 22:58, 6 July 2010 (UTC)

Duke Experiment

I have no clue why there is an entire section dedicated to a hypothetical study conducted and never published in a peer reviewed journal. Kahneman, in part, won a Nobel prize for his research into this and he barely merits a mention here. —Preceding unsigned comment added by 128.135.212.56 (talk) 17:17, 7 January 2010 (UTC)

Substitution Effects

I think the last paragraph as of 12-18-11, saying that the endowment effect might be just a consequence of standard substitution effects, is not correct. The endowment effect is about an agent's choice depending on the way a question is worded, a framing effect, and not on the agent's actual choices. For example, in Knetch's original experiment, in both treatments objectively participants are choosing between two items. It is only the wording of this choice that varies among problems.

I will delete this paragraph if I can figure out how.

Effect incorrectly described?

I'm not sure I understand why the phrase "once their property right to it has been established" is included in the way that it is in the initial introduction. If one's property right to a good has been established then one owns it, and surely no one wants to pay for a good they already own? The point of the endowment effect, as I understand it, is that people want more compensation to be divested of a good they already own than they're prepared to pay to acquire it if they do NOT already own it.

Perhaps I'm misunderstanding the phrase "once their property right to it has been established"? Otherwise, the description of the effect as currently stated seems to make no sense. Perhaps the phrase should go in the middle of the sentence rather than at the end, to make it clear that it applies to WTA rather than WTP. In other words, the sentence should perhaps read "In behavioral economics, the endowment effect (also known as divestiture aversion) is the hypothesis that a person's willingness to accept (WTA) compensation for a good, once their property right to it has been established, is greater than their willingness to pay (WTP) for it." — Preceding unsigned comment added by Brooklyn Eagle (talk • contribs) 14:45, 12 July 2012 (UTC)