The endowment effect and the reference state: Evidence and manipulations

10.1016/j.jebo.2009.04.015Journal of Economic Behavior and Organization712407-413JEBO

Endowment effects? : "Even" with half a million on the table!

In the television show Deal or No Deal a contestant is endowed with a sealed box containing a monetary prize between one cent and half a million euros. In the course of the show the contestant is offered to exchange her box for another sealed box with the same distribution of possible monetary prizes inside. This offers a unique natural experiment for studying endowment effects under high monetary incentives. We find only weak endowment effects when contestants exchange their box for another box with the same distribution of possible prizes

An Experimental Investigation of the Disparity Between WTA and WTP for Lotteries

WTA-WTP disparity, lotteries, background risk, contingent valuation, C91, D81,

Optimal Incentive Contracts for Loss-Averse Managers: Stock Options versus Restricted Stock Grants

This paper provides an explanation for the widespread use of stock option grants in executive compensation. It shows that the optimal incentive contract for loss-averse managers must contain a substantial portion of stock options even when it should consist exclusively of stock grants for "classical" risk-averse managers. The paper also provides an explanation for the drastic increase in the risk-adjusted level of CEO compensations over the past two decades and argues that more option-based compensation should be used in firms with higher cash flow volatility and in industries with a higher degree of heterogeneity among firms. Copyright 2006, The Eastern Finance Association.

Towards a conceptual framework in unitary economics: An extension of a proposition after John O'Brien

10.1108/03068290510618506International Journal of Social Economics3210868-87