The three not-so-wise manoeuvres behind willingness-to-pay calculations
Author(s)
Muurlink, Olav
Griffith University Author(s)
Year published
2013
Metadata
Show full item recordAbstract
Economists seek to value entities that the lay public describe as 'invaluable' or 'priceless' by extrapolating values from responses probing willingness to pay for probabilistic or partial variants of those entities. This paper explores willingness to pay (WTP) and willingness to accept (WTA) from the perspective of psychology, arguing that both techniques depend on the rigour of human cognition, a rigour which is generally and systematically absent in the lay public.Economists seek to value entities that the lay public describe as 'invaluable' or 'priceless' by extrapolating values from responses probing willingness to pay for probabilistic or partial variants of those entities. This paper explores willingness to pay (WTP) and willingness to accept (WTA) from the perspective of psychology, arguing that both techniques depend on the rigour of human cognition, a rigour which is generally and systematically absent in the lay public.
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Journal Title
Interdisciplinary Journal of Economics and Business Law
Volume
2
Issue
4
Publisher URI
Copyright Statement
Self-archiving of the author-manuscript version is not yet supported by this journal. Please refer to the journal link for access to the definitive, published version or contact the author for more information.
Subject
Industrial and Organisational Psychology
Decision Making