Trading experience modulates anterior insula to reduce the endowment effect
People often demand a greater price when selling goods that they own than they would pay to purchase the same goods-a well-known economic bias called the endowment effect. The endowment effect has been found to be muted among experienced traders, but little is known about how trading experience reduces the endowment effect. We show that when selling, experienced traders exhibit lower right anterior insula activity, but no differences in nucleus accumbens or orbitofrontal activation, compared with inexperienced traders. Furthermore, insula activation mediates the effect of experience on the endowment effect. Similar results are obtained for inexperienced traders who are incentivized to gain trading experience. This finding indicates that frequent trading likely mitigates the endowment effect indirectly by modifying negative affective responses in the context of selling.
| Medienart: |
E-Artikel |
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| Erscheinungsjahr: |
2016 |
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| Erschienen: |
2016 |
| Enthalten in: |
Zur Gesamtaufnahme - volume:113 |
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| Enthalten in: |
Proceedings of the National Academy of Sciences of the United States of America - 113(2016), 33 vom: 16. Aug., Seite 9238-43 |
| Sprache: |
Englisch |
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| Beteiligte Personen: |
Tong, Lester C P [VerfasserIn] |
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| Links: |
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| Themen: |
Decision-making |
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| Anmerkungen: |
Date Completed 29.01.2018 Date Revised 13.11.2018 published: Print-Electronic Citation Status MEDLINE |
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| doi: |
10.1073/pnas.1519853113 |
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| funding: |
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| Förderinstitution / Projekttitel: |
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| PPN (Katalog-ID): |
NLM263035085 |
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| 520 | |a People often demand a greater price when selling goods that they own than they would pay to purchase the same goods-a well-known economic bias called the endowment effect. The endowment effect has been found to be muted among experienced traders, but little is known about how trading experience reduces the endowment effect. We show that when selling, experienced traders exhibit lower right anterior insula activity, but no differences in nucleus accumbens or orbitofrontal activation, compared with inexperienced traders. Furthermore, insula activation mediates the effect of experience on the endowment effect. Similar results are obtained for inexperienced traders who are incentivized to gain trading experience. This finding indicates that frequent trading likely mitigates the endowment effect indirectly by modifying negative affective responses in the context of selling | ||
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| 700 | 1 | |a List, John A |e verfasserin |4 aut | |
| 700 | 1 | |a Nusbaum, Howard C |e verfasserin |4 aut | |
| 700 | 1 | |a Hortaçsu, Ali |e verfasserin |4 aut | |
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