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Rationality, Tort Reform and Contingent Valuation: A Classroom Experiment in Starting Point Bias

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Author Info
Victor Matheson () (Department of Economics, College of the Holy Cross)

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Abstract

This 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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File URL: http://www.holycross.edu/departments/economics/RePEc/Matheson_StartingPoint.pdf
File Format: application/pdf
File Function: Original version presented at Western Economic Association Meetings, Vancouver, BC, July 2004
Download Restriction: no

Publisher Info
Paper provided by College of the Holy Cross, Department of Economics in its series Working Papers with number 0509.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length: 12 pages
Date of creation: Jun 2005
Date of revision:
Handle: RePEc:hcx:wpaper:0509

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Phone: (508)793-3362
Fax: (508) 793-3708
Web page: http://www.holycross.edu/departments/economics/website/
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Related research
Keywords: starting point bias contingent valuation tort reform classroom experiment experimental economics

Find related papers by JEL classification:
A2 - General Economics and Teaching - - Economics 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

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This page was last updated on 2008-7-16.

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