Human behavior is not always consistent with standard rational choice predictions. The much-investigated variety of apparent deviations from rational choice predictions provides a promising arena for the merger of economics and biology. Although little is known about the extent to which other...

The endowment effect is the seemingly irrationally tendency to immediately value a possessed item more than the opportunity to acquire the identical item when one does not already possess it. The phenomenon has broad legal implications, as it suggests a drag on trade, occasioned by inconsistent...

The endowment effect is the seemingly irrationally tendency to immediately value a possessed item more than the opportunity to acquire the identical item when one does not already possess it. The phenomenon has broad legal implications, as it suggests a drag on trade, occasioned by inconsistent...

Hundreds of studies demonstrate human cognitive biases that are both inconsistent with “rational” decisionmaking and puzzlingly patterned. One such bias, the “endowment effect” (also known as “reluctance to trade”), occurs when people instantly value an item they have just acquired...