The Willingness to Pay/Willingness to Accept Gap, the "Endowment Effect," Subject Misconceptions and Experimental Procedures for 17 Valuations. Social Science Working Paper no. 1132R (2003)

Content Provider	CiteSeerX
Author	Zeiler, Kathryn Plott, R.
Abstract	We conduct experiments to explore the possibility that subject misconceptions, as opposed to a particular theory of preferences referred to as the “endowment effect, ” account for reported gaps between willingness to pay (“WTP”) and willingness to accept (“WTA”). The literature reveals two important facts. First, there is no consensus regarding the nature or robustness of WTP-WTA gaps. Second, while experimenters are careful to control for subject misconceptions, there is no consensus about the fundamental properties of misconceptions or how to avoid them. Instead, by implementing different types of experimental controls, experimenters have revealed notions of how misconceptions arise. Experimenters have applied these controls separately or in different combinations. Such controls include ensuring subject anonymity, using incentive-compatible elicitation mechanisms, and providing subjects with practice and training on the elicitation mechanism before employing it to measure valuations. The pattern of results reported in the literature suggests that the widely differing reports of WTP-WTA gaps could be due to an incomplete science regarding subject misconceptions. We implement a “revealed theory ” methodology to compensate for the lack of a theory of misconceptions. Theories implicit in experimental procedures found in the
File Format	PDF
Publisher Date	2003-01-01
Access Restriction	Open
Subject Keyword	Elicitation Mechanism Different Combination Social Science Working Paper Experimental Control Wtp-wta Gap Accept Gap Endowment Effect Incomplete Science Particular Theory Fundamental Property Subject Anonymity Incentive-compatible Elicitation Mechanism Experimental Procedure Subject Misconception Revealed Theory Methodology Important Fact
Content Type	Text