Common consequence effects in pricing and choice

U. Schmidt; S.T. Trautmann

doi:10.1007/s11238-012-9349-9

Common consequence effects in pricing and choice

U. Schmidt, S.T. Trautmann

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3 Citations (Scopus)

Abstract

This paper presents an experimental study of common consequence effects in binary choice, willingness-to-pay (WTP) elicitation, and willingness-to-accept (WTA) elicitation. We find strong evidence in favor of the fanning out hypothesis (Machina, Econometrica 50:277–323, 1982) for both WTP and WTA. In contrast, the choice data do not show a clear pattern of violations in the absence of certainty effects. Our results underline the relevance of differences between pricing and choice tasks, and their implications for models of decision making under risk.

Original language	English
Pages (from-to)	1-7
Journal	Theory and Decision
Volume	76
Issue number	1
Early online date	4 Jan 2013
DOIs	https://doi.org/10.1007/s11238-012-9349-9
Publication status	Published - Jan 2014

Keywords

Common consequence effects
fanning out
WTP
WTA
cancelation

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10.1007/s11238-012-9349-9

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Common consequence effects in pricing and choice

Abstract

Keywords

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