John A. List, “Neoclassical Theory Versus Prospect Theory: Evidence from the Marketplace.” Econometrica 72: 615–625, 2004.
• Subjects start with one of four endowments: mug; chocolate bar; both; or, neither. Note that mugs and chocolate bars are common, everyday items.
• Subjects are offered the opportunity to trade for the other good (in the mug or chocolate conditions) or forced to trade their endowment for just one of the goods (both condition) or get to choose either the mug or chocolate (none condition).
• Non-dealers were about four times more likely to leave with the endowed good than with the other good. Dealers, though, betray almost no sign of an endowment effect. Further, for non-dealers, more trading experience reduces the endowment effect.
• Note that “trading experience” refers to trading background for goods unconnected to chocolate bars or mugs.
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