A Dynamic Explanation Of The Willingness To Pay And Willingness To Accept Disparity
AbstractEvidence from laboratory experiments suggests that important disparities exist between willingness to pay (WTP) and compensation demanded for the same good. This study advances, and experimentally tests, a new explanation of the WTP/WTA disparityâa dynamic theory based on the presence of commitment costs. We find that the commitment cost theory combined with a simple behavioral anomaly is able to lend insights into the causes and severity of the WTA/WTP disparity. Further, we find that market experience attenuates the behavioral anomaly, consistent with the notion that no value disparity exists for agents with sufficient market experience.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 51 (2013)
Issue (Month): 1 (01)
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Other versions of this item:
- Kling, Catherine L. & List, John & Zhao, Jinhua, 2011. "A Dynamic Explanation of the Willingness to Pay and Willingness to Accept Disparity," Staff General Research Papers 33896, Iowa State University, Department of Economics.
- Catherine L. Kling & John A. List & Jinhua Zhao, 2010. "A Dynamic Explanation of the Willingness to Pay and Willingness to Accept Disparity," NBER Working Papers 16483, National Bureau of Economic Research, Inc.
- Kling, Catherine L. & List, John & Zhao, Jinhua, 2011. "A Dynamic Explanation of the Willingness to Pay and Willingness to Accept Disparity," Staff General Research Papers 33895, Iowa State University, Department of Economics.
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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RePEc Biblio mentionsAs found on the RePEc Biblio, the curated bibliography for Economics:
- > Environmental and Natural Resource Economics > Environmental Economics > Valuation > Contingent valuation method > Willingness to pay versus willingness to accept
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