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Endowment effects? “Even” with half a million on the table!

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Abstract

In the television show Deal or No Deal, a contestant is endowed with a sealed box containing a monetary prize between one cent and half a million euros. In the course of the show, the contestant is offered to exchange her box for another sealed box with the same distribution of possible monetary prizes inside. This offers a unique natural experiment for studying endowment effects under high monetary incentives. We find evidence of only a weak endowment effect when contestants exchange their box for another box with the same distribution of possible prizes.

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Authors and Affiliations

  1. Institute for Empirical Research in Economics, University of Zurich, Winterthurerstrasse 30, 8006, Zurich, Switzerland

    Pavlo Blavatskyy

  2. Institute for Social and Economic Research and Policy, Columbia University, International Affairs Building 420 West 118th Street, 3355, New York, NY, 10027, USA

    Ganna Pogrebna

Authors
  1. Pavlo Blavatskyy
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  2. Ganna Pogrebna
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Corresponding author

Correspondence to Pavlo Blavatskyy.

Additional information

Previous version of this paper was circulated under the title “Loss Aversion? Not with Half a Million on the Table!”.

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Blavatskyy, P., Pogrebna, G. Endowment effects? “Even” with half a million on the table!. Theory Decis 68, 173–192 (2010). https://doi.org/10.1007/s11238-009-9152-4

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  • DOI: https://doi.org/10.1007/s11238-009-9152-4

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