Multiple attribute search is a central feature of economic life: we consider much more than price when purchasing a home, and more than wage when choosing a job. Search behavior in these environments has recently been found to deviate systematically and substantially from optimal sequential...

In a typical endowment effect experiment, individuals state a higher willingness-to-accept to sell an object than a willingness-to-pay to obtain the object. The leading explanation for the endowment effect is loss aversion for the object. An alternative explanation is based on a buy-sell...

Individuals who evaluate business-related risks often have a preference or goal for the business to perform well. In this paper, we test how such a directional goal affects risk perceptions and the relation between risk perceptions and assessments of value in an investment context. Compared to...

In this Essay, I respond to Professor Markell's analysis of the recent controversy over the cramdown interest rate applied in corporate bankruptcies. I argue that the main source of controversy is a misperception that pervades much of bankruptcy law and scholarship. Namely, courts and scholars...

Bhattacharya et al. (2012) shows that many investors are reluctant to accept and follow financial advice. This study analyzes three possibilities which could cause this misbehavior: non-monetary costs, willingness to become informed and comprehensibility of financial information. As so many...

A leading approach to understanding significant discrepancies between observed willingness to pay (WTP) and willingness to accept (WTA) in policy evaluation is the “endowment effect” — that preferences are based on a reference point or anchor that leads WTA to exceed WTP. Unlike assertions...

We contribute to the literature on the optimal design of auction mechanisms for the procurement of nature conservation activities. We use an economic experiment to examine whether the market efficiency of conservation auctions increases or decreases with repetition. Theory predicts that...

The emergence of empirical evidence suggesting divergence between the willingness- to-accept (WTA), for the sale of an object, and the willingness-to-pay (WTP), for the purchase of an object, has resulted in two explanations. Further they argue that the endowment effect will not apply when the...