Economics Dictionary of ArgumentsHome
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| Endowment effect: The endowment effect is a cognitive bias where people ascribe higher value to things merely because they own them. It leads individuals to overvalue their possessions compared to equivalent items they do not own, impacting decision-making and economic behavior. See also Cognitive biases._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Behavioral Economics on Endowment Effect - Dictionary of Arguments
Henderson I 95 Endowment effect/behavioral economics/Henderson/Globerman: (…) consistent with the UCLA School's belief in the effectiveness of private markets to address problems that arise from imperfect information and transactions costs, organizations will emerge to help individuals make more effcient decisions as consumers and investors because it will be profitable to do so* >Imperfect information, >Transaction cost. Private organisations: A contemporary example is Zillow, an online real estate company. A particular bias that behavioural economists identify, one that accords with the "endowment effect," is homeowners' propensity to value their homes above the amounts that potential buyers are willing to pay for those homes. Zillow provides free home estimates that are created through sophisticated Artificial Intelligence algorithms. This is a powerful example of how private sector organizations can improve the effciency of individual decision-making. >Decision-making processes, >Uncertainty, >Artificial Intelligence. * For an extensive discussion of how private sector organizations can help address the decision-making biases of individuals as discussed in the behavioural economics literature, see Manne and Zywicki (2014)(1). 1. Manne, Geoffrey, and Todd Zywicki (2014). Uncertainty. Evolution and Behavioral Economic Theory. Journal of Law, Economics and Policy 10, 3: 555-580._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Behavioral Economics Henderson I David R. Henderson Steven Globerman The Essential UCLA School of Economics Vancouver: Fraser Institute. 2019 |
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