The Willingness to Pay-Willingness to Accept Gap Revisited: The Role of Emotions and Moral Satisfaction
Abstract
While many earlier studies have found that people’s maximum willingness to pay for having a good is often substantially lower than their minimum willingness to accept not having it, more recent experimental evidence suggests that this discrepancy vanishes for standard consumption goods when an incentive-compatible design without misconceptions is used. This paper hypothesises that there is nevertheless a discrepancy for goods with a perceived moral character, such as contributions to a good cause, and moreover that the reason for this discrepancy can largely be explained by differences in emotions and moral perceptions. The results from a real-money dichotomous-choice experiment, combined with measurements of emotions and morality, are consistent with these hypotheses.
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Date
2011-04Author
Biel, Anders
Johansson-Stenman, Olof
Nilsson, Andreas
Keywords
Willingness to pay-Willingness to accept gap
Endowment effect
Emotions
Ethics
Experiments
Publication type
report
ISSN
1403-2465
Series/Report no.
Working Papers in Economics
497
Language
eng