THE ENDOWMENT EFFECT AS BLESSING

Sivan Frenkel; Yuval Heller; Roee Teper

doi:https://doi.org/10.1111/iere.12300

THE ENDOWMENT EFFECT AS BLESSING

Sivan Frenkel, Yuval Heller, Roee Teper

Tel Aviv University, Bar-Ilan University

Research output: Contribution to journal › Article › peer-review

Abstract

We study the idea that seemingly unrelated behavioral biases can coevolve if they jointly compensate for the errors that any one of them would give rise to in isolation. We suggest that the “endowment effect” and the “winner's curse” could have jointly survived natural selection together. We develop a new family of “hybrid-replicator” dynamics. Under such dynamics, biases survive in the population for a long period of time even if they only partially compensate for each other and despite the fact that the rational type's payoff is strictly larger than the payoffs of all other types.

Original language	English
Pages (from-to)	1159-1186
Number of pages	28
Journal	International Economic Review
Volume	59
Issue number	3
DOIs	https://doi.org/10.1111/iere.12300
State	Published - Aug 2018

All Science Journal Classification (ASJC) codes

Economics and Econometrics

Access to Document

https://doi.org/10.1111/iere.12300

Cite this

@article{dbe7d00489f941e59d7c6e749312f86b,

title = "THE ENDOWMENT EFFECT AS BLESSING",

abstract = "We study the idea that seemingly unrelated behavioral biases can coevolve if they jointly compensate for the errors that any one of them would give rise to in isolation. We suggest that the “endowment effect” and the “winner's curse” could have jointly survived natural selection together. We develop a new family of “hybrid-replicator” dynamics. Under such dynamics, biases survive in the population for a long period of time even if they only partially compensate for each other and despite the fact that the rational type's payoff is strictly larger than the payoffs of all other types.",

author = "Sivan Frenkel and Yuval Heller and Roee Teper",

note = "Publisher Copyright: {\textcopyright} (2018) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association",

year = "2018",

month = aug,

doi = "https://doi.org/10.1111/iere.12300",

language = "الإنجليزيّة",

volume = "59",

pages = "1159--1186",

journal = "International Economic Review",

issn = "0020-6598",

publisher = "Wiley-Blackwell Publishing Ltd",

number = "3",

}

TY - JOUR

T1 - THE ENDOWMENT EFFECT AS BLESSING

AU - Frenkel, Sivan

AU - Heller, Yuval

AU - Teper, Roee

PY - 2018/8

Y1 - 2018/8

N2 - We study the idea that seemingly unrelated behavioral biases can coevolve if they jointly compensate for the errors that any one of them would give rise to in isolation. We suggest that the “endowment effect” and the “winner's curse” could have jointly survived natural selection together. We develop a new family of “hybrid-replicator” dynamics. Under such dynamics, biases survive in the population for a long period of time even if they only partially compensate for each other and despite the fact that the rational type's payoff is strictly larger than the payoffs of all other types.

AB - We study the idea that seemingly unrelated behavioral biases can coevolve if they jointly compensate for the errors that any one of them would give rise to in isolation. We suggest that the “endowment effect” and the “winner's curse” could have jointly survived natural selection together. We develop a new family of “hybrid-replicator” dynamics. Under such dynamics, biases survive in the population for a long period of time even if they only partially compensate for each other and despite the fact that the rational type's payoff is strictly larger than the payoffs of all other types.

UR - http://www.scopus.com/inward/record.url?scp=85046755033&partnerID=8YFLogxK

U2 - https://doi.org/10.1111/iere.12300

DO - https://doi.org/10.1111/iere.12300

M3 - مقالة

SN - 0020-6598

VL - 59

SP - 1159

EP - 1186

JO - International Economic Review

JF - International Economic Review

IS - 3

ER -

THE ENDOWMENT EFFECT AS BLESSING

Abstract

All Science Journal Classification (ASJC) codes

Access to Document

Other files and links

Fingerprint

Cite this