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The Willingness to Pay-Willingness to Accept Gap Revisited: The Role of Emotions and Moral Satisfaction

Anders Biel, Olof Johansson-Stenman () and Andreas Nilsson
Additional contact information
Anders Biel: Department of Psychology, Postal: Göteborg University, Box 640, SE 40530 GÖTEBORG
Andreas Nilsson: Department of Psychology, Postal: Göteborg University, Box 640, SE 40530 GÖTEBORG

No 497, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: While many earlier studies have found that people’s maximum willingness to pay for having a good is often substantially lower than their minimum willingness to accept not having it, more recent experimental evidence suggests that this discrepancy vanishes for standard consumption goods when an incentive-compatible design without misconceptions is used. This paper hypothesises that there is nevertheless a discrepancy for goods with a perceived moral character, such as contributions to a good cause, and moreover that the reason for this discrepancy can largely be explained by differences in emotions and moral perceptions. The results from a real-money dichotomous-choice experiment, combined with measurements of emotions and morality, are consistent with these hypotheses.

Keywords: Willingness to pay-Willingness to accept gap; Endowment effect; Emotions; Ethics; Experiments (search for similar items in EconPapers)
JEL-codes: C91 H41 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2011-04-28
New Economics Papers: this item is included in nep-cbe, nep-dcm, nep-exp and nep-neu
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