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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Format: | Final Year Project (FYP) |
Language: | English |
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2014
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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. |
first_indexed | 2024-10-01T03:44:36Z |
format | Final Year Project (FYP) |
id | ntu-10356/59400 |
institution | Nanyang Technological University |
language | English |
last_indexed | 2024-10-01T03:44:36Z |
publishDate | 2014 |
record_format | dspace |
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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