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Value learning and the willingness to accept - willingness to pay disparityAuthor(s): David C. Kingsley; Thomas C. Brown
Source: Economics Letters. 120: 473-476.
Publication Series: Scientific Journal (JRNL)
Station: Rocky Mountain Research Station
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DescriptionThe assumption that individual preferences are rational and consistent with standard economic theory is often appropriate, but may be optimistic if consumers are uncertain about either their preferences or how the market operates. Both sources of uncertainty may present themselves in lab experiments exploring the well-known disparity between individuals' willingness to accept and willingness to pay. This paper explores the role of value uncertainty in the observed disparity, and finds that providing subjects with a value learning opportunity can reduce the value disparity to insignificance.
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CitationKingsley, David C.; Brown, Thomas C. 2013. Value learning and the willingness to accept - willingness to pay disparity. Economics Letters. 120: 473-476.
Keywordsdiscovered preference hypothesis, value uncertainty, value learning, willingness to accept-willingness to pay disparity, paired comparison experiments
- Does prompting for revision influence subjects' offers in willingness to accept - willingness to pay lab experiments?
- Paired comparison estimates of willingness to accept versus contingent valuation estimates of willingness to pay
- Accounting for respondent uncertainty to improve willingness-to-pay estimates
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