Abstract
In their experiments to measure the endowment effect in market settings, Kahneman, Knetsch, and Thaler (1990; hereafter KKT) assessed the assumption of zero transaction costs associated with the Coase theorem. Their study recruited a sample of advanced undergraduate economics students who were placed in a market setting using coffee mugs as real-world goods, under conditions in which there were zero transaction costs. Their results suggested that an endowment effect lowered trading volume, which should not have occurred if Coase theorem worked in practice. We reexamine the research design employed by KKT, as well as their study’s statistical analysis and results.
Recommended Citation
(2026)
"Coase, Thaler, and Behavioral Economics: Methodological Considerations,"
Journal of Economics and Finance Education: Vol. 24:
Iss.
1, Article 1.
Available at:
https://scholarship.rollins.edu/jefe/vol24/iss1/1
