The willingness to pay-willingness to accept gap: A failed replication of Plott and Zeiler

Dietmar Fehr, Rustamdjan Hakimov and Dorothea Kübler

Discussion Papers, Research Unit: Market Behavior from WZB Berlin Social Science Center

Abstract: We report on experiments to replicate Plott and Zeiler's (2005) findings that the WTP-WTA gap disappears when using procedures that are aimed at reducing misunderstandings, such as training rounds for the BDM mechanism. Following the design by Plott and Zeiler (2005) and Isoni, Loomes, and Sugden (2011) who re-ran the Plott/Zeiler experiments to study the paid practice rounds with lotteries, we replicate the findings from the lottery tasks where a WTP-WTA gap is present in all studies. However, unlike in the two previous studies the WTP-WTA gap does not disappear in the main task where subjects state their WTA or WTP for a mug. We introduce two additional lottery tasks to classify subjects and find that even for the most rational group of subjects who never make dominated choices in the paid practice rounds, the WTP-WTA gap in the mug task exists. The findings are replicated in a similar experiment with USB sticks instead of mugs.

Keywords: endowment effect; WTP-WTA gap; BDM mechanism; misconceptions; replication (search for similar items in EconPapers)
JEL-codes: C72 C92 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-cbe, nep-dcm, nep-exp and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Journal Article: The willingness to pay–willingness to accept gap: A failed replication of Plott and Zeiler (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wzbmbh:spii2015204

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