THE ENDOWMENT EFFECT英语资料.docx

THE ENDOWMENT EFFECT英语资料.docx

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THEENDOWMENTEFFECT英语资料

TheEndowmentEffect

PraveenKujal,UniversidadCarlosIII.

VernonL.Smith,UniversityofArizona.

TheBackground

Theemergenceofempiricalevidencesuggestingdivergencebetweenthewillingness-to-accept（WTA）,forthesaleofanobject,andthewillingness-to-pay（WTP）,forthepurchaseofanobject,hasresultedintwoexplanations.OneoftheexplanationswasproposedbyKahneman,KnetschandThaler（1991）（hereafterKKT）,thatthediscrepancybetweentheWTPandtheWTAmaybeamanifestationoftheendowmenteffect.Thus,“...endowmenteffectswillalmostcertainlyoccurwhenownersarefacedwithanopportunitytosellanitempurchasedforusethatisnoteasilyreplaceable”（p.1344）.Furthertheyarguethattheendowmenteffectwillnotapplywhenthegoodsarepurchasedforresaleandnotforuse;thereisnoendowmenteffectfortheretailfirm,onlyfortheconsumerpurchasingthefirm’sgood.Similarly,theyarguethattheendowmenteffectdoesnotapplytotheexchangeoftokens（orrights）towhichprivateredemptionvalues,orinducedvalueshavebeenassignedbytheexperimenter（Smith,1976）.

ThesecondexplanationcamefromHanemann（1991）whoshowedthatwhenclosesubstitutesexistforthegoodinquestion（andgivenpositiveincomeelasticity）WTAandWTPcanbeshowntobeveryclose,andvice-versa.

GiventheexplanationsforthedivergencebetweentheaverageWTAandWTPtheexperimentalliteraturefocusedondirectchoicetestsofthese（theoretical）explanations,andthereexaminationinmarketcontexts.

Thefirstchoice,andexchange,experimentswererunbyKKTestablishingtheendowmenteffectforCornellandother（emblem）coffeemugsbutnotforinducedvaluetokens.ThesewerefollowedbyexperimentsfromShogrenetal.（1994）andFranciosietal.（1996）.Shogrenetal.establishthattheHannemanhypothesisunderrepeatplayisrobustandthatthedivergencebetweentheWTAandWTPdisappearswithrepeatinteractionforclosesubstitutesbutnotforimperfectsubstitutes.Further,intheirexperimentalsetting（distinctfromthatofKKT）theyshowthatunderrepeatinteractiontheendowmenteffectdisappears.Franciosietal.showthatwecanobserveundertradinginmarketseveniftheWTA-WTPdiscrepancyisnegligible.ThisistheresultofunderrevelationofintramarginalunitsleadingtoveryflatreportedinversesupplyanddemandsothatverysmalldeviationsinreportedWTAandWTPcanleadtoundertrading.

TheExperiments

Kahneman-Knetsch-ThalerChoiceExperiments:

InthetypicalexperimentofKKTanundergraduateclassisdividedintoequalparts.Halfthesubjectswererandomlyassignedtotheroleofbuyersandtheotherhalfsellers.Universityemblemcoffeemugs（Cornell,SimonFraser,orUniversityofBritishColumbia）,costingaround$6inthelocalUniversitybookstore,werethendistributedtothesellers,andallthebuyersweregiventheopportunitytoexaminethemug.Thefollowingformswerethenexecuted.

IWillSellIWillKeep

[Buy][NotBuy]theMug

Ifthepriceis$0____________________

Ifthepriceis$0.50____________________

.....

Ifthepriceis$9.50____________________

Next,arandomprice（KKTusedtheBDMprocedure,inBeckeretal.,1964）wasdrawnfromthelistbetween$0and$9.50,andexchangeswereconductedbytheexperimenteronthebasisofthisprice.Thetypicalresultwasamediansellingpricethatwasdoublethemedianbuyingprice,anobservationthatisconsistentwiththeendowmenteffect.KKT,however,recognizedthatthisproceduredidnotcontrolforanyincomeeffect.Thisproblemwasexacerbatedbythefactthatbuyersintheirexperimentswererequiredtousetheirownfundswhilethesellersweregiventhecoffeemugs.

ToaddresstheneedtocontrolforincomeeffectsKKT（pp.179-80）developedaningeniousvariationontheaboveexperiments.Insteadoftwogroupstheyusedthree:

sellers,buyersandchoosers.Thesellers/buyersmadethesamechoicesasbefore,whilethechooserswereaskedtochooseateachprospectivepricebetweenthemug,orcash.Thus,sellersweregivenamug,andchoosersweregiventherighttoeitheramugorcashastheychose;anyincomeeffectonsellersasdistinctfrombuyers,shouldthenalsoapplytothechoosers.ThedifferenceaccordingtotheKKTimplementationoftheendowmenteffectisthatsellersownthemug,choosersdonot.

Theirresultswereclear:

choosersbehavemorelikebuyersthanlikesellers,althoughchoosersvaluemugssixtypercentmorehighlythanbuyers.（SeeKKT,p.178-80）.

Franciosietal.ChoiceExperiments

Franciosietal.conductedfourexperimentseachwith24subjects（8ineachgroup;N=96subjectsintotal）motivatedbythethree-groupdesignwhichcontrolledforanyincomeeffect.However,theymadeseveralinstructionalchangeswhichmightbeimportantinthecontextofthechoiceexperimentsduetotheirframingeffects.Becausetheuseofemotivetermssuchas“buying,”and“selling”mayalterthestrategicbehaviorofmarketparticipants,Franciosietal.（1996）neutralizedtheirinstructionsandremovedallmentionof“buying”or“selling.”Insteadtheyuseexpressionsthatdidnotsuggestanyspecificrolebehavioronthepartofmarketparticipants.First,thethreegroupsweresimplycalledGroup1,Group2andGroup3.ThesubjectsweretoldthateachmemberofGroup1isanownerofanArizonaWildcatMug,andtheirtaskistochoose,foreachamountofmoney（nomentionof“price”）,betweenretainingtheirmugor,acceptingtheadditionalamountofmoney.EachmemberofGroup2wasdesignatedashavingtherighttochoosebetweenacceptingamug,orretaininganamountofmoneyoutoftheirearningsinapreviousunrelatedexperimentinthesamesession.Finally,eachpersoninGroup3isdesignatedashavingtherighttochoosebetweenamugoracceptinganadditionalamountofmoney.Thus,allsubjectsweresymmetricallydescribedaschoosers,butunderdifferentinitialconditions.

Alltheirchoiceexperimentswererunattheendoftwosimultaneouspostedoffermarketexperiments（6buyers,6sellersineach）,reportedinFranciosietal.（1995）.Subjectswereassignedtothethreegroupsrandomly,andwerepaidtheirearningsincashattheendofthemarketexperiments.Earningsrangedfrom$8.75-$62.50providingallGroup2subjectswithsufficientfundstoobtainamugbasedontheexperimentalprices.Themugswerepricedat$9.95（pricetagsremoved）inthecampusbookstore.

FromTable1itcanbeseenthatthesubjectsreportsubstantiallylowerGroup1WTA,asomewhathigherWTP,andahigherGroup3WTA,thandidtheKKTsubjects.SubstitutingachoicetaskforthebuyingandsellingtasksappearstonarrowtheWTA-WTPdiscrepancy.Pairwisestatisticaltests,however,showthatthedatafromallthreegroupscomefromdifferentdistributions（Franciosi,eta.,1996）.Hence,thequalitativedifferencesamongthethreegroups,aspostulatedbyKKT,weresupportedasisevidentinthelastrowofTable1.

KKT（1991）Exchangeexperiments:

InadditiontotheirBDMchoiceexperimentsKKTreporttheresultsofseveralexchangeexperiments.Halfthesubjectswererandomlyassignedtheroleofbuyers,theotherssellers.Sellerswereeachendowedwithamug,whiletheformerusedmoneytheyhadbeenaskedtobringtoclass.Buyerseachsubmittedabidpricetobuyamug,sellerseachsubmittedanofferpricetosellthemug.Their‘bids’and‘offers’weresolicitedbyaskingeachsubjecttochoosebetweenapriceandamugforaseriesofpricesasintheBDMprocedureexceptthattherangestartsat$0.25andgoesupinincrementsof$0.50.Theintersectionofthedescendingbidsandascendingoffersdeterminesthepriceandquantityexchanged.Iftherearenoendowmentorincomeeffects,thenduetotherandomallocationofsubjectstothebuyorsellcondition,thesupplyscheduleofthosegiventhemugsshouldbeamirrorimageofthedemandscheduleforthosenotgiventhemugs.Thisleadstothepredictionthatone-halfofthemugsshouldtrade.Consequently,intheirexperimentswith22buyersand22sellers,11mugswerepredictedtotrade.Theyobservethatbetween1and4tradeatpricesbetween$4.25and$4.75.Asbeforeonlyonebid/offertrialischosenatrandom.

MugExchangeExperimentsusingUniformPriceDoubleAuction

Franciosietal.（1996）usedtheuniformpricedoubleauction（UPDA）mechanismtostudymugexchangeduetoitsstrongequilibratingproperties.（SeeMcCabe,RassentiandSmith,1993）.Theauthorsfeltthatusinganefficientauctionmarketmechanismmaybecrucialtotestingtheundertradinghypothesis.

Twoseriesofexperimentswererun.Ineachexperiment24differentsubjectswererandomlyassignedtogroupsof12buyersand12sellers.Eachserieswasdividedintoparts1and2.InPart1ofseries1eachbuyerwasassignedavalueandeachselleracostfromtheuniformdistributionon[$0,$9.99atthebeginningofeachof10（or12）tradingperiods.Thisbaselineservedasatrainingsession.Allperiodslasted4minutes.InPart2,Series1and2,eachbuyerwasendowedwitha$9.99cashbalancewhichwastheirstokeepifnomugwaspurchased;eachsellerwasendowedwithaUniversityofArizonaemblemmugpricedat$9.95whichwastheirstokeepifnotsold.EachsubjectwaspaidincashalloftheirearningsfromtheinducedvaluetrainingexperimentsinPart1ofeachofthesessions.Inseries2,Part1usedtheconstantvolumeequilibriumenvironment,butineachperiodarandomconstantwasaddedtoeachvalue,andthevaluesrandomlyassignedtoeachindividual.Part2ofseries2waslikethatofseries1exceptthatthepricetag（$9.95）wasleftoneachmug,andthiswaspointedout