Working Paper: NBER ID: w16908
Authors: John A. List
Abstract: A vibrant literature has emerged that suggests willingness to pay and willingness to accept measures of value are quite different for inexperienced consumers but that value differences erode with market experience. One potential shortcoming of this literature is that market experience is endogenous. This study presents a framed field experiment that exogenously induces market experience. Empirical findings support the premise that market experience, alone, can eliminate an important market anomaly.
Keywords: Market Experience; Willingness to Pay; Willingness to Accept; Market Anomalies
JEL Codes: C93; D01; Q5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| market experience (G10) | reduction of WTP-WTA disparity (F16) |
| market experience (G10) | willingness to trade (F19) |
| willingness to trade (F19) | trading behavior (G41) |