Thursday 8
Bounded Rationality
Paolo Crosetto
› 11:45 - 12:15 (30min)
› Salle 7 - Bâtiment 2
The role of misconception and loss aversion in the WTA-WTP Gap: An empirical investigation
Emmanuel Kemel  1@  , Hela Maafi  2@  
1 : GREGHEC-CNRS
GROUPE HEC
F-78350 Jouy-en-Josas, France -  France
2 : Université Paris 8
Université Paris VIII Vincennes-Saint Denis : EA3391
2 rue de la liberté, Saint Denis -  France

The willingess to accept (WTA)-willingness to pay (WTP) gap is one of the most central
topics in behavioral economics. While a general consensus attributes the WTA-WTP gap
to loss aversion, Plott and Zeiler (2005) argue that the gap is a consequence of subjects'
misconceptions about the experimental procedure and can be eliminated if we control for
a series of inappropriate experimental practices. Isoni, Loomes, and Sugden (2011) demonstrate
that the gap persists after controlling for misconceptions. We present an experiment
to examine the part of loss aversion in explaining the observed WTA-WTP gap after controlling
for misconceptions. We measure individually (1) the WTA-WTP gap using Plott
and Zeiler's procedure and (2) the loss aversion parameter of prospect theory. Our results
show a small but significant correlation between the WTA-WTP gap in a misconception-free
setting and the loss aversion measure, suggesting that loss aversion has something to do with
the observed gap


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