An anomaly in economics occurs when an empirical outcome is challenging to justify, or when it requires unrealistic assumptions for its explanation using the underlying theories. In simpler terms, it pertains to a real-life scenario that contradicts or departs from the conventional theory. The anomalies discussed by Kahneman et al. (1991) are the endowment effectContinue reading “On Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias”
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