Abstract The risky investment game of Gneezy and Potters (Q J Econ 112(2):631–645, 1997) has been proposed as a simple tool to measure risk aversion in applied settings, especially attractive settings where participants may have limited education. However, this can produce significant endowment effect (attached the initial position), so that analysis behavior should not be done Expected Utility...

We develop a dynamic portfolio choice model with illiquid alternative assets to analyze the “endowment model,” widely adopted by institutional investors, such as pension funds, university endowments, and sovereign wealth funds. In model, asset has lockup but can be liquidated at any time paying proportional cost. how investors engage in liquidity diversification investing multiple staggered exp...

How do people judge the monetary value of objects? One clue is provided by the typical endowment study (D. Kahneman, J. L. Knetsch, & R. H. Thaler, 1991), in which participants are randomly given either a good, such as a coffee mug, that they may later sell ("sellers") or a choice between the good and amounts of cash ("choosers"). Sellers typically demand at least twice as much as choosers, inc...

We consider the role of the endowment in nonprofit organizations. Nonprofit managers often describe the endowment, or fund balance, as serving a precautionary savings function. We provide a description of endowment size, for nonprofit organizations in a wide range of industries in the United States, and find that a large number of organizations have endowments that exceed levels that would norm...