The main researsh topic in this article is the endowment effect. Endowment effect describes a phenomenon in which most people often demand considerably higher prices for products that they own than they could pay for if they were to buy it. This effect also referred to as status quo bias…
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Regardless of the participants’ immense experience in the real world market, he found out that the willingness to accept the mugs was nearly three times higher than the willingness to pay. This is an indication that even experienced negotiators are also susceptible to the endowment effect (Angeletos, Repetto, Tobacman, and Weinberg, 2001; p. 57). The result of these two experiments is similar indicating that the human brain makes a decision almost in a similar way and on the other hand, it is apparent to note that persons under the same environmental conditions often operate under the same constraints (List, 2004; p. 617). It should also be noted that the same constraints affect even those who have experience in certain fields. The endowment effect can be analysed using neoclassical or standard economics that is strongly built on the assumptions that ever turned to well established facts (Babcock et al. 1994; pg. 928). The most vital and preferred assumption is that all economic agents that include consumers, suppliers, and companies among others are fully rational and their visible hand works create market efficiency (Knetsch and Wong, 2009; p. 410). Rational economists often consider these assumptions a basic, logical, and self-evident; hence, they do not require any empirical scrutiny (Babcock and Loewenstein, 1997; p. 110). Materialism has also been identified as one of the forces behind endowment effect. Some people believe that the material they own is a central occupation that provides them with success and happiness. Using materialism to determine the existence of endowment effect, 317 first year students at Katholieke University Leuven, Belgium were subjected to a study. The survey provided a...
This paper discusses the endowment effect, which can be analysed using neoclassical or standard economics that is strongly built on the assumptions that ever turned to established facts Materialism has also been identified as one of forces behind endowment effect.
Analysing endowment effect through experimental evidence often leads to the behavioural economics that targets the analysis of new variables that are often ignored by the standard economics
Endowment effect largely depends on behavioural decision making that analyses how people often make certain decisions. Behavioural decision-making is a vital field that is used by different other fields including psychology, political science, management, and economics among other
Endowment effect is an essential element in economics since it causes conflict between the actual behaviour and macroeconomic theory that says that value of an object should be independent of the ownership
The core behavioural economics depict realism of the psychological economic analysis that aims at improving the economics on its own terms including generating better phenomena predictions, generating theoretical insights, and suggesting better policies At the same time behavioural economics does not disregard neoclassical approach to the understanding and analysis of economics and neither does it reject utility maximization, efficiency, and equilibrium
The understanding of standard economics is purely pegged on the understanding of behavioural economics without concentrating on the psychology of such concepts. In regards to human behaviour, standard economics model assumes that the actions of people are fully pegged on their full information on the action in question
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This paper presents an essay drawn on the theories of rent and urban economies. The theories explain in detail the patterns in office rent shown in the Colliers UK Office Rent Map. The first section covers the theory of neighborhood. The second one is the natural evolution theory followed by the bid rent theory.
In the study, the main objective is to identify the impact of economic slowdown and recession on BP Plc. The study will try to explain the key factors such as economic slowdown, economic conditions and will try to identify the key theories relevant for this study. The numerous drivers of the economic slowdown will also be studied in depth.
A theory may display a systematic way for one to understand behaviours, situations, and events (Akers, & Krohn, 2009). The idea of broad application or generality is quite crucial hence theories are abstract by nature. Despite the fact that different theoretical health behaviour models could give a reflection of similar and general ideas, each and every theory apply a number of unique vocabularies in the articulation of the specific factors that are vital.
Although media, such as, television and movies have a strong influence on the violent behaviors of people but testosterone and other biological factors cause more violence in people than media. In this paper, we will discuss how testosterone and other biological factors cause more violence in people as compared to media.
As such, the paper starts by outlining the meaning of corporate veil and this will be followed by a critical analysis of the case drawing examples from different case laws and statutes related to this topic. According to Cillers et al (2004), the association of persons or an organised body can acquire legal personality by way of separate Act.
Different events may be described as economic phenomena that also touch on other areas of study. Like any other social science, economics entails the development of new theories that are aimed at formulating theories to help people get a better understanding of the world they live in (Cartwright, 2011:67).
This approach has attracted various criticisms over time which had spurred wide debate among academicians. The recent global financial markets turmoil bears testimony to the fact that economic agents do not always behave in a way, which is predicted by the mathematical model of probability.
word Hypnos (god of sleep), the father of Morpheus, Greek god of dreams, and the words hypnosis and hypnotism are derived from the term neurypnosis, coined in the mid-1800s, by James Braid, a Scottish surgeon (ibid). Braid based his researches on the same lines as Franz
del into consideration, one can conclude that it is applicable in tracking stocks prices since it comprises of degree of randomness which tends to be steady with the instability of commodity.
This model can be applied in finance and physics via modeling random behavior, which
This cognitive processes, also referred to as mental accounting, form the basis on which the individuals and households make financial decisions and evaluate them, based on how the outcomes of such financial decisions