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61 UCLA L. Rev. 2 (2013-2014)

handle is hein.journals/uclalr61 and id is 1 raw text is: Against Endowment Theory: Experimental Economics and Legal Scholarship Gregory Klass Kathryn Zeiler ABSTRACT Endowment theory holds the mere ownership of a thing causes people to assign greater value to it than they otherwise would. The theory entered legal scholarship in the early 1990s and quickly eclipsed other accounts of how ownership affects valuation. Today, one finds appeals to a generic endowment effect throughout the legal literature. Recent experimental results, however, suggest that the empirical evidence for endowment theory is weak at best. When the procedures used in laboratory experiments are altered to rule out alternative explanations, the endowment effect disappears. This and other recent evidence suggest that mere ownership does not affect willingness to trade or exchange. Many experimental economists no longer ascribe to endowment theory. Legal scholars, however, continue to rely on endowment theory to predict legal entitlements' probable effects on expressed valuations. That reliance is no longer warranted. Endowment theory's influence in legal scholarship provides important lessons about how legal scholars and policymakers should, and should not, use results from experimental economics. AUTHORS Gregory Klass is Professor of Law and Associate Dean of Research and Academic Programs, Georgetown University Law Center. Kathryn Zeiler is Professor of Law, Georgetown University Law Center. Many provided insightful comments on this and earlier drafts, including Robert Ahdieh, Jack Beermann, Gregg Bloche, Richard Craswell, Heidi Li Feldman, Matthew Gerke, James Griener, Vicki Jackson, Donald Langevoort, David Luban, John Mikhail, Alison Morantz, William Park, Eduardo Pefialver, Charles Plott, Jedediah Purdy, Warren Schwartz, Michael Seidman, Matthew Stephenson, Christian Turner, and Robin West. We also received helpful comments from law school workshop participants at Boston University, Cornell University, Emory University, George Mason University, Georgetown University, Harvard University, Hebrew University, HEC Montreal, the University of Bologna, the University of Michigan, the University of North Carolina, the University of Paris, the University of Pennsylvania, Stanford University, and the Federal Trade Commission. We received stellar research assistance from Stacy Goto, Carl Hinneschiedt, Sophia Lee, Louis Rosenberg, and Joseph Shifer. 61 UCLA L. REV. 2 (2013)