Mispredicting the Endowment Effect: Underestimation of Owners’ Selling Prices by Buyer’s Agents

@inproceedings{Loewenstein2002MispredictingTE,
  title={Mispredicting the Endowment Effect: Underestimation of Owners’ Selling Prices by Buyer’s Agents},
  author={George Loewenstein and David Dunning and Leaf Van Boven},
  year={2002}
}
People tend to value objects more simply because they own them. Prior research indicates that people underestimate the impact of this endowment effect on both their own and other people’s preferences. We show that underestimating the endowment effect and hence owners’ selling prices can lead to suboptimal behavior in settings with economic consequences. Subjects acting as “buyer’s agents” made suboptimally low offers for an owner’s commodity. Although buyer’s agents learned to make increasingly… Expand
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