A new explanation for the WTP/WTA disparity

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Date
2001-12-01
Authors
Zhao, Jinhua
Kling, Catherine
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Abstract

We propose a new explanation for the WTP/WTA disparity in experiments and surveys. Uncertainty, irreversibility and limited learning opportunities can generate commitment costs, driving a wedge between WTP and WTA. We present experimental evidence that supports our hypothesis.

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This is a working paper of an article from Economics Letters, 73(3) 2001; 293-300. DOI: 10.1016/S0165-1765(01)00511-0.

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