Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 193: Emotions, Morality and Public Goods: The WTA-WTP Disparity Revisited
Anders Biel (), Olof Johansson-Stenman () and Andreas Nilsson ()
Additional contact information
Anders Biel: Department of Psychology, Göteborg University, Postal: Box 500, SE 405 30 Göteborg
Olof Johansson-Stenman: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 405 30 GÖTEBORG
Andreas Nilsson: Department of Psychology, Göteborg University, Postal: Box 500, SE 405 30 GÖTEBORG
Abstract: Empirical evidence suggests that people’s maximum willingness to pay for having a good is often substantially lower than their minimum willingness to accept not having it, and that this discrepancy tends to be especially large when valuing public goods. This paper hypothesizes that differences in emotions (e.g. regret) and moral perceptions can account for much of this discrepancy for public goods. A simple, real-money dichotomous-choice experiment is set up to test these hypotheses, which are largely supported.
Keywords: Willingness to pay; Willingness to accept gap; Endowment effect; Emotions; Ethics; Experiments
19 pages, January 25, 2006
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