Foundations of Law and Economics
Intermediate
Endowment Effect
A pattern in which people often demand more to give up an entitlement or object than they would be willing to pay to acquire it.
Why It Matters
The endowment effect complicates entitlement analysis because initial allocation may influence valuation, bargaining, waiver, damages, and default-rule effects.
Selected Literature
A short list of directly relevant archive entries.
1972
Intermediate
Property Rules, Liability Rules, and Inalienability: One View of the Cathedral
Guido Calabresi and A. Douglas Melamed
Harvard Law Review
1979
Advanced
1991
Advanced
Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias
Daniel Kahneman, Jack L. Knetsch, and Richard H. Thaler
Journal of Economic Perspectives
2016
Advanced
Related Cases
1805
Foundations of Law and Economics
Pierson v. Post
3 Cai. R. 175 (N.Y. Sup. Ct. 1805)
First possession, capture rules, and the administrability of property rights in wild animals.
1970
Foundations of Law and Economics
Boomer v. Atlantic Cement Co.
26 N.Y.2d 219, 257 N.E.2d 870 (1970)
Permanent damages, injunctions, and the choice between property-rule and liability-rule protection.
1707
Foundations of Law and Economics
Keeble v. Hickeringill
11 East 574, 103 Eng. Rep. 1127 (K.B. 1707)
Property protection, malicious interference, and incentives to make productive use of land.
1854
Foundations of Law and Economics
Hadley v. Baxendale
9 Exch. 341, 156 Eng. Rep. 145 (1854)
Foreseeability, information disclosure, and limits on consequential damages for breach of contract.