Nobel Prize awarded to Richard Thaler… Marginal Revolution

by Jim Colburn • Monday, October 9, 2017

Here is my “go to” blog, Marginal Revolution, on Richard Thaler:

”Thaler, with Kahneman and Knetsch, was a major force behind discovering and measuring the so-called “endowment effect.” Once you have something, you value it much more! Maybe three or four times as much, possibly more than that. It makes policy evaluation difficult, because as economists we are not sure how much to privilege the status quo. Should we measure “willingness to pay” — what people are willing to pay for what they don’t already have? Or “willingness to be paid” — namely how eager people are to give up what they already possess? The latter magnitude will lead to much higher valuations for the assets in question. This by the way helps explain status quo bias in politics and other spheres of life. People value something much more highly once they view it as theirs.”

There is more here:  http://marginalrevolution.com/marginalrevolution/2017/10/nobel-prize-awarded-richard-thaler.html

 

 

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