This is the author accepted manuscript. The final version is available from Springer via the DOI in this record.
We report experiments investigating how experience
influences the endowment effect. Our experiments feature
endowments which are bundles of unfamiliar consumption goods. We
examine how a subject’s willingness to swap items from their
endowment is influenced by prior experiences of tasting the goods in
question and by prior experiences of choosing between them. We do
not find a statistically significant endowment effect in our baseline
treatment and, because of this, we are unable to test for an effect of
consumption experience. We do find an endowment effect when the
endowment is acquired in two instalments and, in this setting, we find
some evidence that choice experience increases trading. In a followup
experiment, we find evidence that the absence of an endowment
effect in our baseline treatment is due to subjects being more willing
to swap when they do not have to give up the last unit of their
endowment.
Starmer acknowledges the support of the ESRC
funded Network for Integrated Behavioural Science (awards ES/K002201/1 and
ES/P008976/1). Lindsay acknowledges the support of the ESRC (PTA-0300-2005-00567).