Endowment effect

A vast body of experimental studies in psychology and economics finds that individuals tend to value goods more and demand higher prices when they own the goods than they would be willing to pay for the good when they do not already own it. Although research on the endowment effect has been done for more than three decades, it’s theory, empirical methodology, results, and implications continue to be topics of intense discussion among economists, lawyers and psychologists. In this entry, we review the theoretical framework and empirical evidence on the endowment effect and highlight some implications for law and economics research