Preference reversals and disparities between willingness to pay and willingness to accept in repeated markets

Arbeitspapier

Previous studies suggest that two otherwise robust 'anomalies' - preference reversals and disparities between buying and selling valuations - are eroded when respondents participate in repeated markets. We report an experiment which investigates whether this is true when factors neglected in previous studies are controlled, and which distinguishes between anomalies revealed in the behaviour of individual market participants and anomalies revealed in market prices. Our results confirm the decay of buy/sell disparities, but not of preference reversal. This raises doubts about the hypothesis that, in general, repeated markets reveal anomaly-free preferences, even among the marginal traders who determine prices.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CeDEx Discussion Paper Series ; No. 2009-24

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual
• Subject: preference reversal ; willingness to accept ; willingness to pay ; repeated market ; Sozialforschung ; Verhaltensökonomik ; Präferenztheorie ; Willingness to pay ; Test

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Loomes, Graham ; Starmer, Chris ; Sugden, Robert
• Event: Veröffentlichung
• (who): The University of Nottingham, Centre for Decision Research and Experimental Economics (CeDEx)
• (where): Nottingham
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/49689
• Last update: 10.03.2025, 11:44 AM CET