Munich Personal RePEc Archive

The Endowment Effect as a blessing

Frenkel, Sivan and Heller, Yuval and Teper, Roee (2013): The Endowment Effect as a blessing.

There is a more recent version of this item available.
[thumbnail of MPRA_paper_61894.pdf]

Download (573kB) | Preview


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 pay specific attention to barter trade of the kind that was common in prehistoric societies, and 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” selection dynamics and show that under such dynamics, even if biases only partially compensate for each other, individuals with both biases can survive in the population in the long run.

Available Versions of this Item

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.