Disentangling endowment effect and the preferences for good deals in the presence of trade-in : an experimental analysis

The disparity between Willingness to Accept (WTA) and Willingness to Pay (WTP) is commonly explained by endowment effect, which describes pain-of-losing account. Recent literature has presented an alternative viewpoint that WTA-WTP disparity could be due to aversion to bad deals. However, there are...

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Main Authors: Tan, Kwang Hui, Tee, Hong Da, Quek, Yong Jia
Other Authors: School of Humanities and Social Sciences
Format: Final Year Project (FYP)
Language:English
Published: 2014
Subjects:
Online Access:http://hdl.handle.net/10356/59400
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author Tan, Kwang Hui
Tee, Hong Da
Quek, Yong Jia
author2 School of Humanities and Social Sciences
author_facet School of Humanities and Social Sciences
Tan, Kwang Hui
Tee, Hong Da
Quek, Yong Jia
author_sort Tan, Kwang Hui
collection NTU
description The disparity between Willingness to Accept (WTA) and Willingness to Pay (WTP) is commonly explained by endowment effect, which describes pain-of-losing account. Recent literature has presented an alternative viewpoint that WTA-WTP disparity could be due to aversion to bad deals. However, there are no known literature that are able to disentangle these two effects. Our study presents a distinct factor that can affect the WTA-WTP disparity using the trade-in method. In a two-part experiment, we attempt to observe the changes in WTA for the loss of currently endowed goods in the presence of a trade-in option. Our results suggest that along with endowment effect and aversion to bad deals, an inclination towards good deals (good deals effect) is a factor that explains the further WTA-WTP disparity. We thus contribute to the current literature by extending another method to study WTA-WTP disparity.
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spelling ntu-10356/594002019-12-10T13:16:56Z Disentangling endowment effect and the preferences for good deals in the presence of trade-in : an experimental analysis Tan, Kwang Hui Tee, Hong Da Quek, Yong Jia School of Humanities and Social Sciences Associate Professor Yohanes Eko Riyanto DRNTU::Social sciences The disparity between Willingness to Accept (WTA) and Willingness to Pay (WTP) is commonly explained by endowment effect, which describes pain-of-losing account. Recent literature has presented an alternative viewpoint that WTA-WTP disparity could be due to aversion to bad deals. However, there are no known literature that are able to disentangle these two effects. Our study presents a distinct factor that can affect the WTA-WTP disparity using the trade-in method. In a two-part experiment, we attempt to observe the changes in WTA for the loss of currently endowed goods in the presence of a trade-in option. Our results suggest that along with endowment effect and aversion to bad deals, an inclination towards good deals (good deals effect) is a factor that explains the further WTA-WTP disparity. We thus contribute to the current literature by extending another method to study WTA-WTP disparity. Bachelor of Arts 2014-05-05T03:17:07Z 2014-05-05T03:17:07Z 2014 2014 Final Year Project (FYP) http://hdl.handle.net/10356/59400 en Nanyang Technological University 72 p. application/pdf
spellingShingle DRNTU::Social sciences
Tan, Kwang Hui
Tee, Hong Da
Quek, Yong Jia
Disentangling endowment effect and the preferences for good deals in the presence of trade-in : an experimental analysis
title Disentangling endowment effect and the preferences for good deals in the presence of trade-in : an experimental analysis
title_full Disentangling endowment effect and the preferences for good deals in the presence of trade-in : an experimental analysis
title_fullStr Disentangling endowment effect and the preferences for good deals in the presence of trade-in : an experimental analysis
title_full_unstemmed Disentangling endowment effect and the preferences for good deals in the presence of trade-in : an experimental analysis
title_short Disentangling endowment effect and the preferences for good deals in the presence of trade-in : an experimental analysis
title_sort disentangling endowment effect and the preferences for good deals in the presence of trade in an experimental analysis
topic DRNTU::Social sciences
url http://hdl.handle.net/10356/59400
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