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The willingness-to-accept/willingness-to-pay disparity in repeated markets : loss aversion or 'bad-deal' aversion?
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Isoni, Andrea (2011) The willingness-to-accept/willingness-to-pay disparity in repeated markets : loss aversion or 'bad-deal' aversion? Theory and Decision, Vol.71 (No.3). pp. 409-430. doi:10.1007/s11238-010-9207-6 ISSN 0040-5833.
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Official URL: http://dx.doi.org/10.1007/s11238-010-9207-6
Abstract
Several experimental studies have reported that an otherwise robust regularity-the disparity between Willingness-To-Accept and Willingness-To-Pay-tends to be greatly reduced in repeated markets, posing a serious challenge to existing reference-dependent and reference-independent models alike. This article offers a new account of the evidence, based on the assumptions that individuals are affected by good and bad deals relative to the expected transaction price (price sensitivity), with bad deals having a larger impact on their utility ('bad-deal' aversion). These features of preferences explain the existing evidence better than alternative approaches, including the most recent developments of loss aversion models.
| Item Type: | Journal Article | ||||
|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HB Economic Theory | ||||
| Divisions: | Faculty of Social Sciences > Economics | ||||
| Library of Congress Subject Headings (LCSH): | Value, Pricing, Loss aversion | ||||
| Journal or Publication Title: | Theory and Decision | ||||
| Publisher: | Springer Netherlands | ||||
| ISSN: | 0040-5833 | ||||
| Official Date: | September 2011 | ||||
| Dates: |
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| Volume: | Vol.71 | ||||
| Number: | No.3 | ||||
| Page Range: | pp. 409-430 | ||||
| DOI: | 10.1007/s11238-010-9207-6 | ||||
| Status: | Peer Reviewed | ||||
| Publication Status: | Published | ||||
| Access rights to Published version: | Restricted or Subscription Access | ||||
| Date of first compliant deposit: | 18 December 2015 | ||||
| Date of first compliant Open Access: | 18 December 2015 | ||||
| Funder: | Economic and Social Research Council (Great Britain) (ESRC) | ||||
| Grant number: | PT-030-2005-00035 (ESRC) |
Data sourced from Thomson Reuters' Web of Knowledge
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