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Delegation or Takeover of Decision rights: Gains or Losses

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  • Carmen Sainz Villalba

Abstract

This paper analyzes whether there is a higher willingness-to-pay when faced with uncertain gains or uncertain losses. In addition, we look at how the restriction on choice, established with different framings, impacts the WTP. We observe that there is no difference in the WTP between gains and losses, but there is a difference in the WTP between different framings of the restriction of choice. Specifically, we see that respondents who are faced with a delegation decision have a smaller WTP than those who only face a decision of choosing between a pair of lotteries. In addition, we find that the WTP is even smaller when the default of a third-party agent choosing is imposed.

Suggested Citation

  • Carmen Sainz Villalba, "undated". "Delegation or Takeover of Decision rights: Gains or Losses," Working Papers tax-mpg-rps-2024-12, Max Planck Institute for Tax Law and Public Finance.
    • Handle: RePEc:mpi:wpaper:tax-mpg-rps-2024-12
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    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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