By extending a typical endowment effect experiment with the possibility of winning the endowment in a real effort contest, we found two reinforcing effects that led to a complete market failure. Subjects who won the item in the effortful competition had a very high willingness to accept (trophy winner effect). By contrast, subjects who were not successful had an extremely low willingness to pay for the same item (trophy loser effect). We disentangle different components of these effects and investigate the underlying emotional responses. Further, we analyze the duration of the effects and discuss economic implications. Copyright © 2013 John Wiley & Sons, Ltd.