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Understanding the WTA-WTP gap: Attitudes, feelings, uncertainty and personality

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  • Georgantzís, Nikolaos
  • Navarro-Martínez, Daniel

Abstract

We present an experiment designed to study the psychological basis for the willingness to accept (WTA)-willingness to pay (WTP) gap. Specifically, we conduct a standard WTA-WTP economic experiment to replicate the gap and include in it five additional instruments to try to follow the psychological processes producing it. These instruments are designed to measure five psychological constructs we consider especially relevant: (1) attitudes, (2) feelings, (3) familiarity with the target good, (4) risk attitudes, and (5) personality. Our results provide important new insights into the psychological foundations of the WTA-WTP disparity, which can be used to organize some major previous results and cast serious doubts on the claim that the gap might be just a consequence of inappropriate experimental practice.

Suggested Citation

  • Georgantzís, Nikolaos & Navarro-Martínez, Daniel, 2010. "Understanding the WTA-WTP gap: Attitudes, feelings, uncertainty and personality," Journal of Economic Psychology, Elsevier, vol. 31(6), pages 895-907, December.
    • Handle: RePEc:eee:joepsy:v:31:y:2010:i:6:p:895-907
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    2. Tunçel, Tuba & Hammitt, James K., 2014. "A new meta-analysis on the WTP/WTA disparity," Journal of Environmental Economics and Management, Elsevier, vol. 68(1), pages 175-187.
    3. Şule Güney & Ben R. Newell, 2019. "An exploratory investigation of the impact of evaluation context on ambiguity aversion," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 14(3), pages 335-348, May.
    4. Grebitus, Carola & Lusk, Jayson L. & Nayga, Rodolfo M., 2013. "Explaining differences in real and hypothetical experimental auctions and choice experiments with personality," Journal of Economic Psychology, Elsevier, vol. 36(C), pages 11-26.
    5. García-Gallego, Aurora & Georgantzís, Nikolaos & Jaramillo-Gutiérrez, Ainhoa, 2012. "Gender differences in ultimatum games: Despite rather than due to risk attitudes," Journal of Economic Behavior & Organization, Elsevier, vol. 83(1), pages 42-49.
    6. Giuseppe Attanasi & Francesco Passarelli & Giulia Urso & Hana Cosic, 2019. "Privatization of a Tourism Event: Do Attendees Perceive it as a Risky Cultural Lottery?," Sustainability, MDPI, vol. 11(9), pages 1-16, May.
    7. Iván Barreda-Tarrazona & Gerardo Sabater-Grande & Nikolaos Georgantzis, 2020. "Risk elicitation through the S-GG lottery panel task: Implementation note," Working Papers 2020/23, Economics Department, Universitat Jaume I, Castellón (Spain).
    8. Gong, Cynthia M. & Lizieri, Colin & Bao, Helen X.H., 2019. "“Smarter information, smarter consumers”? Insights into the housing market," Journal of Business Research, Elsevier, vol. 97(C), pages 51-64.
    9. repec:cup:judgdm:v:14:y:2019:i:3:p:335-348 is not listed on IDEAS

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