Pricing risk and ambiguity: The effect of perspective taking

Bibliographic Details
Authors and Corporations: Trautmann, Stefan T., Schmidt, Ulrich
Title: Pricing risk and ambiguity: The effect of perspective taking
published:
Kiel Institute for the World Economy (IfW) Kiel, 2011
Summary:There is a large literature showing that willingness-to-accept (WTA) is usually much higher than willingness-to-pay (WTP) in empirical studies although they should be roughly equal according to traditional economic theory. A second stream of literature shows that people are typically ambiguity averse, i.e. they prefer lotteries with known probabilities over lotteries with unknown ones. Our study combines both streams of literature and analyzes whether there is an interaction between the WTP-WTA disparity and ambiguity aversion.
Type of Resource:E-Article
Source:EconStor (German National Library of Economics, ZBW)
BASE - Bielefeld Academic Search Engine
Language: English