From Hypothetical to Real: Analyzing WTA Bias in Pawn Shop Deals

Andrea Morone and Paola Tiranzoni
Additional contact information
Paola Tiranzoni: Focus Economics, Barcelona, Spain

Journal of Behavioral Economics for Policy, 2024, vol. 8, issue 2, 41-54

Abstract: Understanding the divergence between hypothetical and actual willingness-to-accept (WTA) valuations is important for both economic theory and real-world applications. This study analyzes this divergence using a unique dataset from the reality television series Pawn Stars, which captures authentic bargaining interactions. We examine how item characteristics - such as type, origin, price range - and negotiation factors - like buyer experience and expert appraisal - influence hypothetical bias and negotiation outcomes. Our empirical findings reveal a persistent positive hypothetical bias, mainly driven by higher price ranges and specific item categories. Items acquired through purchase or discovery exhibit less bias than personal possessions, and high-value goods display smaller disparities between hypothetical and actual WTA valuations. These results enhance our understanding of real-world bargaining dynamics and provide valuable insights into mitigating hypothetical biases in economic assessments.

Keywords: hypothetical bias; WTA; bargaining game; pawnshop; field experiment (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://sabeconomics.org/journal/RePEc/beh/JBEPv1/articles/JBEP-8-2-3.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:beh:jbepv1:v:8:y:2024:i:2:p:41-54

Access Statistics for this article

Journal of Behavioral Economics for Policy is currently edited by Michelle Baddeley

More articles in Journal of Behavioral Economics for Policy from Society for the Advancement of Behavioral Economics (SABE) Contact information at EDIRC.
Bibliographic data for series maintained by SABE ().