Value learning and the willingness to accept–willingness to pay disparity

David Kingsley and Thomas C. Brown

Economics Letters, 2013, vol. 120, issue 3, 473-476

Abstract: The 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.

Keywords: Discovered preference hypothesis; Value uncertainty; Value learning; Willingness to accept–willingness to pay disparity; Paired comparison experiments (search for similar items in EconPapers)
JEL-codes: D01 D03 D80 Q51 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:120:y:2013:i:3:p:473-476

DOI: 10.1016/j.econlet.2013.05.034

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