• Economics
  • Published 2006

Laboratory Bilateral Gift Exchange: The Impact of Loss Aversion

  title={Laboratory Bilateral Gift Exchange: The Impact of Loss Aversion},
  author={Dennis A. V. Dittrich and Anthony Ziegelmeyer},
We present a systematic robustness test of the persistence of gift-exchanges in the laboratory. Our data clearly establish that the effect of social forces is dramatically crowded out by loss aversion. This was not observed before, as in other studies that allow for nominal losses participants were endowed with a substantial lump sum payment. We did not endow our participants with some initial wealth (they also got no show-up fee). Instead, participants were required to sign an agreement before… CONTINUE READING

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