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The Willingness to Pay-Willingness to Accept Gap Revisited: The Role of Emotions and Moral Satisfaction

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Author Info

  • Biel, Anders

    (Department of Psychology)

  • Johansson-Stenman, Olof

    ()
    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Nilsson, Andreas

    (Department of Psychology)

Abstract

While many earlier studies have found that people’s maximum willingness to pay for having a good is often substantially lower than their minimum willingness to accept not having it, more recent experimental evidence suggests that this discrepancy vanishes for standard consumption goods when an incentive-compatible design without misconceptions is used. This paper hypothesises that there is nevertheless a discrepancy for goods with a perceived moral character, such as contributions to a good cause, and moreover that the reason for this discrepancy can largely be explained by differences in emotions and moral perceptions. The results from a real-money dichotomous-choice experiment, combined with measurements of emotions and morality, are consistent with these hypotheses.

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Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 497.

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Length: 26 pages
Date of creation: 28 Apr 2011
Date of revision:
Handle: RePEc:hhs:gunwpe:0497

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Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Keywords: Willingness to pay-Willingness to accept gap; Endowment effect; Emotions; Ethics; Experiments;

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References

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Cited by:
  1. Nathalie Havet & Magali Morelle & Alexis Penot & Raphaël Remonnay, 2012. "The information content of the WTP-WTA gap: An empirical analysis among severely ill patients," Working Papers 1213, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
  2. Guven, Cahit, 2012. "Reversing the question: Does happiness affect consumption and savings behavior?," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 701-717.
  3. León, Carmelo J. & Araña, Jorge E. & Hanemann, W. Michael & Riera, Pere, 2014. "Heterogeneity and emotions in the valuation of non-use damages caused by oil spills," Ecological Economics, Elsevier, vol. 97(C), pages 129-139.

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