Article
Resolving Differences in Willingness to Pay and Willingness to Accept
American Economic Review
Document Type
Article
Disciplines
Publication Date
3-1-1994
Abstract
This paper tests the conjecture that the divergence of willingness to pay (WTP) and willingness to accept (WTA) for identical goods is driven by the degree of substitution between goods. In contrast to well-known results for market goods with close substitutes (i.e., candy bars and coffee mugs), our results indicate a convergence of WTP and WTA measures of value. However, for a nonmarket good with imperfect substitutes (i.e., reduced health risk), the divergence of WTP and WTA value measures is persistent, even with repeated market participation and full information on the nature of the good.
Copyright Owner
American Economic Association
Copyright Date
1994
Language
en
File Format
application/pdf
Citation Information
Jason F. Shogren, Seung Y. Shin, Dermot J. Hayes and James B. Kliebenstein. "Resolving Differences in Willingness to Pay and Willingness to Accept" American Economic Review Vol. 84 Iss. 14 (1994) p. 255 - 270 Available at: http://works.bepress.com/dermot_hayes/7/
This article is from American Economic Review 84, no. 1 (March 1994): 255–270.