Empirical evidence of anchoring and loss aversion from art auctions

Kathryn Graddy (), Lara Loewenstein, Jianping Mei (), Mike Moses () and Rachel Pownall
Additional contact information
Kathryn Graddy: Brandeis University
Jianping Mei: Cheung Kong Graduate School of Business
Mike Moses: Beautiful Asset Advisors LLC

Journal of Cultural Economics, 2023, vol. 47, issue 2, No 4, 279-301

Abstract: 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.

Keywords: Anchoring; Loss aversion; Endowment effect; Art auctions (search for similar items in EconPapers)
Date: 2023
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Working Paper: Empirical Evidence of Anchoring and Loss Aversion from Art Auctions (2015)
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DOI: 10.1007/s10824-022-09459-2

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