THE ENDOWMENT EFFECT AS BLESSING

• 成果类型: Article
• 署名作者: Frenkel, Sivan; Heller, Yuval; Teper, Roee
• 署名单位: Tel Aviv University; Bar Ilan University; Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12300
• 发表日期: 2018
• 页码: 1159-1186
• 关键词: evolutionary stability; incomplete information; loss aversion; Preference evolution; selection dynamics; initial increase; Stable sets; anomalies; MARKET; games

摘要

We study the idea that seemingly unrelated behavioral biases can coevolve if they jointly compensate for the errors that any one of them would give rise to in isolation. We suggest that the endowment effect and the winner's curse could have jointly survived natural selection together. We develop a new family of hybrid-replicator dynamics. Under such dynamics, biases survive in the population for a long period of time even if they only partially compensate for each other and despite the fact that the rational type's payoff is strictly larger than the payoffs of all other types.