Advanced Search
MyIDEAS: Login to save this article or follow this journal

Market simulation and the provision of public goods: A non-paternalistic response to anomalies in environmental evaluation

Contents:

Author Info

  • Sugden, Robert

Abstract

Most normative economics assumes that individuals have coherent preferences. This paper responds to growing evidence of failures of this assumption, particularly in the context of stated-preference methods widely used in environmental policy analysis. It proposes a non-paternalistic concept of consumer sovereignty that does not assume preference coherence, is satisfied by competitive markets, and can be applied to the provision of public goods. A key implication is that decisions should reflect valuations revealed 'at the point of consumption'. Such valuations, which can be inferred from hedonic prices, may be less susceptible to willingness-to-accept (WTA)/willingness-to-pay (WTP) disparities than those elicited by stated-preference methods.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6WJ6-4TP49JG-1/2/f6f30b4408a5e907cd8137e6fe4d1536
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 57 (2009)
Issue (Month): 1 (January)
Pages: 87-103

as in new window
Handle: RePEc:eee:jeeman:v:57:y:2009:i:1:p:87-103

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622870

Related research

Keywords: Market simulation Public goods Paternalism Environmental evaluation;

References

References listed on IDEAS
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.:
as in new window
  1. Cherry, Todd L. & Crocker, Thomas D. & Shogren, Jason F., 2003. "Rationality spillovers," Journal of Environmental Economics and Management, Elsevier, Elsevier, vol. 45(1), pages 63-84, January.
  2. Richard H. Thaler & Cass R. Sunstein, 2003. "Libertarian Paternalism," American Economic Review, American Economic Association, American Economic Association, vol. 93(2), pages 175-179, May.
  3. Cherry, Todd L. & Shogren, Jason F., 2007. "Rationality crossovers," Journal of Economic Psychology, Elsevier, Elsevier, vol. 28(2), pages 261-277, April.
  4. Botond Koszegi & Matthew Rabin, 2005. "A Model of Reference-Dependent Preferences," Levine's Bibliography 784828000000000341, UCLA Department of Economics.
  5. Chu, Yun-Peng & Chu, Ruey-Ling, 1990. "The Subsidence of Preference Reversals in Simplified and Marketlike Experimental Settings: A Note," American Economic Review, American Economic Association, American Economic Association, vol. 80(4), pages 902-11, September.
  6. Robert Sugden, 2004. "The Opportunity Criterion: Consumer Sovereignty Without the Assumption of Coherent Preferences," American Economic Review, American Economic Association, American Economic Association, vol. 94(4), pages 1014-1033, September.
  7. Shogren, Jason F. & Shin, Seung Youll & Hayes, Dermot J. & Kliebenstein, James, 1994. "Resolving Differences in Willingness to Pay and Willingness to Accept," Staff General Research Papers, Iowa State University, Department of Economics 701, Iowa State University, Department of Economics.
  8. Barberis, Nicholas & Thaler, Richard, 2003. "A survey of behavioral finance," Handbook of the Economics of Finance, Elsevier, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, edition 1, volume 1, chapter 18, pages 1053-1128 Elsevier.
  9. repec:reg:wpaper:320 is not listed on IDEAS
  10. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 98(6), pages 1325-48, December.
  11. John A. List, 2003. "Does Market Experience Eliminate Market Anomalies?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 118(1), pages 41-71, February.
  12. Graham Loomes & Chris Starmer & Robert Sugden, 2003. "Do Anomalies Disappear in Repeated Markets?," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 113(486), pages C153-C166, March.
  13. Jason F. Shogren & Tommy Stamland, 2002. "Skill and the Value of Life," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 110(5), pages 1168-1197, October.
  14. Gode, Dhananjay K & Sunder, Shyam, 1993. "Allocative Efficiency of Markets with Zero-Intelligence Traders: Market as a Partial Substitute for Individual Rationality," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(1), pages 119-37, February.
  15. John Sutton, 1997. "One Smart Agent," RAND Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 28(4), pages 605-628, Winter.
  16. Bateman, Ian J, et al, 1997. "A Test of the Theory of Reference-Dependent Preferences," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(2), pages 479-505, May.
  17. Cass R. Sunstein & Richard H. Thaler, 2003. "Libertarian paternalism is not an oxymoron," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, Federal Reserve Bank of Boston, vol. 48(Jun).
  18. Horowitz, John K. & McConnell, K. E., 2003. "Willingness to accept, willingness to pay and the income effect," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 51(4), pages 537-545, August.
  19. Tversky, Amos & Kahneman, Daniel, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 106(4), pages 1039-61, November.
  20. Coursey, Don L & Hovis, John L & Schulze, William D, 1987. "The Disparity between Willingness to Accept and Willingness to Pay Measures of Value," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 102(3), pages 679-90, August.
  21. John A. List & Jason F. Shogren, 1999. "Price Information and Bidding Behavior in Repeated Second-Price Auctions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 81(4), pages 942-949.
  22. Munro, Alistair & Sugden, Robert, 2003. "On the theory of reference-dependent preferences," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 50(4), pages 407-428, April.
  23. Robert Sugden, 2007. "The value of opportunities over time when preferences are unstable," Social Choice and Welfare, Springer, Springer, vol. 29(4), pages 665-682, December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Norwood, F. Bailey & Lusk, Jayson L., 2011. "A calibrated auction-conjoint valuation method: Valuing pork and eggs produced under differing animal welfare conditions," Journal of Environmental Economics and Management, Elsevier, Elsevier, vol. 62(1), pages 80-94, July.
  2. Stephan Marette & Jutta Roosen & Sandrine Blanchemanche, 2011. "The Combination of lab and field experiments for benefit-cost analysis," Working Papers, Institut National de la Recherche Agronomique, France 40757, Institut National de la Recherche Agronomique, France.
  3. Aronsson, Thomas & Johansson-Stenman, Olof, 2011. "Animal Welfare and Social Decisions," Working Papers in Economics, University of Gothenburg, Department of Economics 485, University of Gothenburg, Department of Economics.
  4. Lindsey, Robin, 2011. "State-dependent congestion pricing with reference-dependent preferences," Transportation Research Part B: Methodological, Elsevier, Elsevier, vol. 45(10), pages 1501-1526.
  5. Christian Schubert, 2012. "Opportunity and Preference Learning," Papers on Economics and Evolution, Philipps University Marburg, Department of Geography 2012-08, Philipps University Marburg, Department of Geography.
  6. Christian Schubert & Andreas Chai, 2012. "Sustainable Consumption and Consumer Sovereignty," Papers on Economics and Evolution, Philipps University Marburg, Department of Geography 2012-14, Philipps University Marburg, Department of Geography.
  7. Robinson Lisa A & Hammitt James K., 2011. "Behavioral Economics and the Conduct of Benefit-Cost Analysis: Towards Principles and Standards," Journal of Benefit-Cost Analysis, De Gruyter, De Gruyter, vol. 2(2), pages 1-51, April.
  8. Parkhurst, Gregory M. & Nowell, Clifford, 2014. "The Role of Confidence in Truthful Revelation of Private Values," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, Northeastern Agricultural and Resource Economics Association, vol. 43(2), August.
  9. Elisabeth Gsottbauer & Jeroen Bergh, 2011. "Environmental Policy Theory Given Bounded Rationality and Other-regarding Preferences," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 49(2), pages 263-304, June.
  10. Ben McQuillin & Robert Sugden, 2012. "Reconciling normative and behavioural economics: the problems to be solved," Social Choice and Welfare, Springer, Springer, vol. 38(4), pages 553-567, April.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:jeeman:v:57:y:2009:i:1:p:87-103. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.