Empirical evidence of anchoring and loss aversion from art auctions

K. Graddy, L. Loewenstein, J.P. Mei*, M. Moses, R.A.J. Pownall

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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Abstract

We provide evidence for the behavioral biases of anchoring and loss aversion in paintings sold at auction. We find that anchoring is more important for items that are resold quickly and that the effect of loss aversion increases with the time that a painting is held. This evidence contributes significantly to the empirical evidence of the endowment effect: of increasing loss aversion with the length of holding. However, we do not find evidence that investors can take advantage of these behavioral biases.
Original languageEnglish
Pages (from-to)279-301
Number of pages23
JournalJournal of Cultural Economics
Volume47
Issue number2
Early online date17 Aug 2022
DOIs
Publication statusPublished - Jun 2023

Keywords

  • Anchoring
  • Loss aversion
  • Endowment effect
  • Art auctions
  • WILD BOOTSTRAP
  • PREFERENCES
  • PRICES

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