Document Type

Article

Publication Date

3-1994

Journal or Book Title

American Economic Review

Volume

84

Issue

14

First Page or Article ID Number

255

Last Page

270

Abstract

This paper tests the conjecture that the divergence of willingness to pay (WTP) and willingness to accept (WTA) for identical goods is driven by the degree of substitution between goods. In contrast to well-known results for market goods with close substitutes (i.e., candy bars and coffee mugs), our results indicate a convergence of WTP and WTA measures of value. However, for a nonmarket good with imperfect substitutes (i.e., reduced health risk), the divergence of WTP and WTA value measures is persistent, even with repeated market participation and full information on the nature of the good.

Comments

This article is from American Economic Review 84, no. 1 (March 1994): 255–270.

Copyright Owner

American Economic Association

Language

en

File Format

application/pdf

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