Despairing Over Disparities: Explaining the Difference Between Willingness to Pay and Willingness to Accept

摘要: This paper examines the three major explanations for disparity between WTP and WTA observed in contingent value surveys laboratory experiments: a belief that results must be biased some fashion, Hanemann's (1991) substitutes hypothesis, loss aversion model proposed by Tversky Kahneman (1991). Starting from assumption individuals make utility maximizing choices, we develop structural equations yield parametric tests of hypotheses within single, non-experimental framework. The approach is flexible enough to incorporate variety functional form distributional assumptions can applied either data open-ended bids or dichotomous choice questions.