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A new explanation for the WTP/WTA disparity

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  • Zhao, Jinhua
  • Kling, Catherine L.

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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Suggested Citation

  • Zhao, Jinhua & Kling, Catherine L., 2001. "A new explanation for the WTP/WTA disparity," Economics Letters, Elsevier, vol. 73(3), pages 293-300, December.
    • Handle: RePEc:eee:ecolet:v:73:y:2001:i:3:p:293-300
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