Disentangling Psychological Sources of Overpricing in Anticommons Dilemmas: Strategic Incentives, Endowment Effects, and Interdependence of Outcomes

• Published in: Journal of behavioral decision making Vol. 28; no. 3; pp. 224 - 238
• Main Authors: Glöckner, Andreas, Tontrup, Stephan, Bechtold, Stefan
• Format: Journal Article
• Language: English
• Published: Chichester Blackwell Publishing Ltd 01.07.2015; Wiley Periodicals Inc
• Subjects: anticommons; Economic incentives; Endowment; endowment effect; Incentives; Interdependence; Pricing; Pricing policies; Psychological factors; Risk; social dilemmas; Strategic behaviour; strategic incentives; Studies
• ISSN: 0894-3257; 1099-0771
• DOI: 10.1002/bdm.1839

Anticommons are a special kind of mixed‐motive dilemma in which negative effects for society are caused by the excessive use of exclusion rights. In two fully incentivized experiments on trading goods with risky prospects, we disentangle three psychological sources that have been suggested to contribute to increased pricing in anticommons dilemmas: the effects of strategic incentives for overpricing, endowment effects, and interdependence of outcomes. Our results show that pricing of risky prospects in the anticommons is only marginally influenced by endowment status, whereas participants readily respond to incentives to overprice and to the interdependence of outcomes. Endowment effects are reduced both when strategic incentives to overprice are provided and when outcomes of subjects become interdependent. As a result, endowment effects for risky prospects are strongly reduced or even disappear completely in anticommons dilemmas. Our results render support for an interaction model instead of an additive effect model in which both incentives and endowment effects would drive up pricing. Copyright © 2014 John Wiley & Sons, Ltd.