In this paper, we relax the hard closure property of experiments that have been used to study endowment effect in laboratory. We study differences in benchmark environments (hard closure) and an environment that allows participants to reverse the decisions taken in the laboratory (soft closure)....

We develop a model which combines general risk-averse preferences with anticipated loss aversion to explain bidding behavior in the first-price auction, where both risk-aversion and loss aversion induce ‘overbidding.' We then show that the nonparametric utility function and loss aversion...

We study a model that combines bidder-specific risk-averse preferences with anticipated loss aversion to explain bidding in induced value first-price auctions. We first show that, like risk-aversion, loss aversion causes ‘overbidding,’ relative to the bidding without risk and loss aversion....

This paper studies theoretically and experimentally how the possibility of a negative payoff to one player in 2-by-2 hawk-dove games affects the strategic behavior of both players. Exposing column players to a possibility of negative payoff allows us to examine if row players can anticipate the...

We run experiments of first-price auctions with two groups, by which we directly detect the presence of bidders' loss aversion. Each human bidder bids against three pre-programmed computer bidders -- computers independently draw their values from the uniform distribution and bid their values in...