Value learning and the willingness to accept–willingness to pay disparity
AbstractThe assumption that individual preferences are rational and consistent with standard economic theory is often appropriate, but may be optimistic if consumers are uncertain about either their preferences or how the market operates. Both sources of uncertainty may present themselves in lab experiments exploring the well-known disparity between individuals’ willingness to accept and willingness to pay. This paper explores the role of value uncertainty in the observed disparity, and finds that providing subjects with a value learning opportunity can reduce the value disparity to insignificance.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 120 (2013)
Issue (Month): 3 ()
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Web page: http://www.elsevier.com/locate/ecolet
Discovered preference hypothesis; Value uncertainty; Value learning; Willingness to accept–willingness to pay disparity; Paired comparison experiments;
Find related papers by JEL classification:
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
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