A simple explanation within the theory of indifference curves is offered for the experimental observations concerning the disparity between willingness to pay (WTP) and willingness to accept (WTA). Following Morrison's evidence, this explanation rests largely on the endowment effect. Two demand curves which are distinguished in terms of WTP and WTA are derived.
|Number of pages||3|
|Journal||Applied Economics Letters|
|Publication status||Published - 2000|