WTP/WTA Disparity: Have We Been Observing Dynamic Values but Interpreting Them as Static?, The
Catherine Kling (),
John List () and
Jinhua Zhao ()
Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University
This study advances, and experimentally tests, a new explanation for the disparity between willingness to pay (WTP) and willingness to accept (WTA)-a dynamic neoclassical theory based on the presence of commitment costs. While to date neoclassical models have not explained the observed data patterns well, we find that the commitment cost theory is able to explain adequately the causes and severity of the WTP/WTA value disparity. In particular, using data gathered from an actual marketplace, even the most stringent of our theoretical conjectures-cases where WTP values are predicted to exceed WTA values-oftentimes are met.
Keywords: field experiment; neoclassical theory; willingness to accept; willingness to pay; WTP/WTA disparity. (search for similar items in EconPapers)
JEL-codes: Q21 Q26 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed
Downloads: (external link)
https://www.card.iastate.edu/products/publications/pdf/03wp333.pdf Full Text (application/pdf)
https://www.card.iastate.edu/products/publications/synopsis/?p=479 Online Synopsis (text/html)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ias:cpaper:03-wp333
Access Statistics for this paper
More papers in Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University Contact information at EDIRC.
Bibliographic data for series maintained by ().