Rationality, Tort Reform and Contingent Valuation: A Classroom Experiment in Starting Point Bias
AbstractThis simple classroom experiment demonstrates the existence of starting point bias. Asked to place a dollar value on a non-market good such as the loss of a limb or the destruction of a wetland, students place a much smaller value on the loss if a small value is first suggested by the questioner while placing a significantly higher value on the loss when a large value is originally suggested. This experiment can be used in theory classes to demonstrate the limits of individual rationality or in applied classes in law or environmental economics in relation to tort reform or contingent valuation.
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Bibliographic InfoPaper provided by College of the Holy Cross, Department of Economics in its series Working Papers with number 0509.
Length: 12 pages
Date of creation: Jun 2005
Date of revision:
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Web page: http://www.holycross.edu/departments/economics/website/
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starting point bias; contingent valuation; tort reform; classroom experiment; experimental economics;
Find related papers by JEL classification:
- A2 - General Economics and Teaching - - Economic Education and Teaching of Economics
- C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-06-14 (All new papers)
- NEP-ENV-2005-06-14 (Environmental Economics)
- NEP-EXP-2005-06-14 (Experimental Economics)
- NEP-LAW-2005-06-14 (Law & Economics)
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