Schmidt & Bauer on Christmas Presents & the Endowment Effect

Christoph M. Schmidt (Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI Essen) ; Institute for the Study of Labor (IZA) ; Centre for Economic Policy Research (CEPR)) & Thomas K. Bauer (Rhine-Westphalia Institute for Economic Research (RWI-Essen) ; University of Bochum – Faculty of Economics ; Institute for the Study of Labor (IZA)) have posted WTP vs. WTA: Christmas Presents and the Endowment Effect on SSRN. Here is the abstract: Using data on the valuation of Christmas gifts received by students in different fields at a German university, we investigate whether the endowment effect differs between students of economics and other respondents and whether it varies with the market price of the object under consideration. Our estimation results suggest that economics students have both, a significant lower WTP and WTA, indicating that existing studies on the efficiency loss of holiday gifts and experimental studies on the endowment effect that…

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