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| Author: | Chapman, G. B. |
| Title: | Similarity and reluctance to trade |
| Journal: | Journal of Behavioral Decision Making
1998 : MAR, VOL. 11:1, p. 47-58 |
| Index terms: | TRADE LOSS INDIVIDUAL BEHAVIOUR |
| Language: | eng |
| Abstract: | After decision makers are endowed with an object, they are reluctant to trade it for an alternative item. The endowment effect can be explained by loss aversion. Consequently there is no reluctance to trade when no true loss is involved. Studies investigated whether reluctance to trade declines when the trade involves less of a loss - when one item is traded for another very similar item. Three experiments of four didn't reveal a relation between willingness to trade and the similarity between two items being traded. A fourth, however indicated that subjects were quite willing to trade for an identical item, less willing to trade for a similar item, and even less willing to trade for a dissimilar item. Reluctance to trade decreased as the similarity between the endowment and the alternative increased. |
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