Understanding the WTA–WTP gap: Attitudes, feelings, uncertainty and personality

Abstract

a b s t r a c tWe present an experiment designed to study the psychological basis for the willingness to accept (WTA)-willingness to pay (WTP) gap. Specifically, we conduct a standard WTA-WTP economic experiment to replicate the gap and include in it five additional instruments to try to follow the psychological processes producing it. These instruments are designed to measure five psychological constructs we consider especially relevant: (1) attitudes, (2) feelings, (3) familiarity with the target good, (4) risk attitudes, and (5) personality. Our results provide important new insights into the psychological foundations of the WTA-WTP disparity, which can be used to organize some major previous results and cast serious doubts on the claim that the gap might be just a consequence of inappropriate experimental practice.

Ownership Status and the Representation of Assets of Uncertain Value: The Balloon Endowment Risk Task (BERT)

“…Trautmann & Schmidt, 2012;Okada, 2011;Van Dijk & Van Knippenberg, 1998) and with a larger body of research on the valuation of simple consumer goods by owners and non-owners, which has not formally manipulated uncertainty. For example, Georgantzís and Navarro-Martínez, (2010) found that familiarity with a product (a component of uncertainty) correlates negatively with value judgments of owners. Uncertainty about an object's value is also likely to be a source of large disparities in the size of the endowment effect found in the literature.…”

Privatization of a Tourism Event: Do Attendees Perceive it as a Risky Cultural Lottery?

“…An alternative method consists in asking the willingness to accept a price against quality improvement. Georgantzís and Navarro-Martínez [27] showed that the willingness-to-accept-willingness-to-pay gap depends on some responder's idiosyncratic features and on his/her familiarity with the product under scrutiny.…”

“…The second individual trait that we examine is attendees' willingness to pay for a quality increase in the cultural good (see [23,24]). We elicit it through a hypothetical question commonly asked in the contingent valuation literature to assess the value of a non-market good (see [25][26][27]). Here, we are not interested in assessing the economic value attached to the festival by participants.…”

Gender differences in ultimatum games: Despite rather than due to risk attitudes

“…In fact, the necessary condition for any risk to be preferred to the certain payoff is that r > c · (t − 1). 8 See, for example, Sabater-Grande andGeorgantzís (2002) andGeorgantzís and Navarro-Martínez (2010).9 Filling 20 numbered envelops with their corresponding numbered single-page letters addressed to the responders of a large European questionnaire.10 In order to avoid undesirable session effects, subjects in each session are divided into two separate matching groups. Differences across groups within the same treatment are not statistically significant and data reported here are the result of aggregation within treatments.11 In period 30, a random number is drawn among the integers between 30 and 35 to determine the last period.…”