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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.

Suggested Citation

  • Zhao, Jinhua & Kling, Catherine L., 2001. "A new explanation for the WTP/WTA disparity," ISU General Staff Papers 200112010800001232, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:200112010800001232
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