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The Trophy Effect

The Trophy Effect By extending a typical endowment effect experiment with the possibility of winning the endowment in a real effort contest, we found two reinforcing effects that led to a complete market failure. Subjects who won the item in the effortful competition had a very high willingness to accept (trophy winner effect). By contrast, subjects who were not successful had an extremely low willingness to pay for the same item (trophy loser effect). We disentangle different components of these effects and investigate the underlying emotional responses. Further, we analyze the duration of the effects and discuss economic implications. Copyright © 2013 John Wiley & Sons, Ltd. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Behavioral Decision Making Wiley

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Publisher
Wiley
Copyright
Copyright © 2014 John Wiley & Sons, Ltd.
ISSN
0894-3257
eISSN
1099-0771
DOI
10.1002/bdm.1812
Publisher site
See Article on Publisher Site

Abstract

By extending a typical endowment effect experiment with the possibility of winning the endowment in a real effort contest, we found two reinforcing effects that led to a complete market failure. Subjects who won the item in the effortful competition had a very high willingness to accept (trophy winner effect). By contrast, subjects who were not successful had an extremely low willingness to pay for the same item (trophy loser effect). We disentangle different components of these effects and investigate the underlying emotional responses. Further, we analyze the duration of the effects and discuss economic implications. Copyright © 2013 John Wiley & Sons, Ltd.

Journal

Journal of Behavioral Decision MakingWiley

Published: Jan 1, 2014

Keywords: ; ; ;

References