Asymmetric Preference Formation in Willingness to Pay Estimates in Discrete Choice Models

Individuals, when faced with choices amongst a number of alternatives, often adopt a variety of processing rules, ranging from simple linear to complex non-linear treatment of each attribute defining the offer of each alternative. In this paper, the authors investigate the presence of asymmetry in preferences to test for reference effects and differential willingness to pay, according to whether gains or losses are being valued. The findings offer clear evidence of an asymmetrical response to increases and decreases in attributes, when compared to the corresponding values for a reference alternative where the degree of asymmetry varies across attributes and population segments.

Language

  • English

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Filing Info

  • Accession Number: 01109946
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jul 31 2008 1:20PM