Title

A new explanation for the WTP/WTA disparity

Campus Units

Economics

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

12-2001

Journal or Book Title

Economics Letter

Volume

73

Issue

3

First Page or Article ID Number

293

Last Page

300

DOI

10.1016/S0165-1765(01)00511-0

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.

JEL Classification

D60, D83, C90

Comments

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