The Trophy Effect
By extending a typical endowment effect experiment with the possibility to win the endow-ment in a real effort contest, we found two enforcing effects that led to a complete market failure. Subjects who won the item in the competition had an extremely high willingness to accept (trophy effect). By c...
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| Published in: | MAGKS - Joint Discussion Paper Series in Economics (Band 25-2011) |
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| Main Authors: | , |
| Format: | Work |
| Language: | English |
| Published: |
2011
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| Subjects: | |
| Online Access: | PDF Full Text |
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| Summary: | By extending a typical endowment effect experiment with the possibility to win the endow-ment in a real effort contest, we found two enforcing effects that led to a complete market failure. Subjects who won the item in the competition had an extremely high willingness to accept (trophy effect). By contrast, subjects who were not successful had an extremely low willingness to pay for the same item (reverse trophy effect). We disentangle the different components of the trophy effect, compare it to similar experiments, and discuss its important economic implications. |
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| Physical Description: | 18 Pages |
| ISSN: | 1867-3678 |
| DOI: | 10.17192/es2024.0091 |