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A Dynamic Explanation of the Willingness to Pay and Willingness to Accept Disparity / Catherine L. Kling, John A. List, Jinhua Zhao.
- Format:
- Book
- Author/Creator:
- Kling, Catherine L.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w16483.
- NBER working paper series no. w16483
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2010.
- Summary:
- Evidence from laboratory experiments suggests that important disparities exist between willingness to pay (WTP) and compensation demanded for the same good. This study advances, and experimentally tests, a new explanation of the WTP/WTA disparity--a dynamic theory based on the presence of commitment costs. We find that the commitment cost theory combined with a simple behavioral anomaly is able to lend insights into the causes and severity of the WTA/WTP disparity. Further, we find that market experience attenuates the behavioral anomaly, consistent with the notion that no value disparity exists for agents with sufficient market experience.
- Notes:
- Print version record
- October 2010.
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