What have we learnt about Loss Aversion and Endowment Effects? Still an anomaly?

This paper presents an insight into the theoretical and empirical literature of Loss Aversion and Endowment Effect. The definition and conceptualisation of both ideas is introduced in order to define a framework for further analysis. Their presence implies a radical change in some of the basic standard postulates of microeconomic foundation. These concepts robustly predict a divergence between Willingness to Accept and Willingness to Pay, even in a perfect-market framework and invalidate the standard assumptions of transitivity and reversibility of preferences under the neoclassical theory of consumer choice. Twenty years of successive positive evidence on Loss Aversion and Endowment Effect support the theoretical implications showed in this paper. I conclude that Loss Aversion and Endowment Effects truly matter and their existence must not be taken into account just as an anomaly or puzzle, but as part of a new theory in itself, leading to new questions and challenges for future economic research. Still an Anomaly? " If economists want their propositions to qualify as science, and if they wish not to be vulnerable to attack, then they must reformulate their theories so that they say something about´how people do in fact behave´. " [Hutchison 1938, p.134]