Abstract
Publisher Summary The emergence of empirical evidence suggesting divergence between the willingness- to-accept (WTA), for the sale of an object, and the willingness-to-pay (WTP), for the purchase of an object, has resulted in two explanations. Further they argue that the endowment effect will not apply when the goods are purchased for resale and not for use; there is no endowment effect for the retail firm, only for the consumer purchasing the firm's good. Similarly, they argue that the endowment effect does not apply to the exchange of tokens (or rights) to which private redemption values, or induced values have been assigned by the experimenter. Given the explanations for the divergence between the average WTA and WTP the experimental literature focused on direct choice tests of these (theoretical) explanations, and there examination in market contexts.
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