Ž. Ž. Willingness to accept WTA is usually substantially higher than willingness to pay WTP. These constructs have been studied for roughly 30 years and with a wide variety of goods. This paper reviews those studies. We find that the less the good is like an ''ordinary market good,'' the higher is the ratio. The ratio is highest for non-market goods, next… (More)
Benefit-cost analysis of government projects that reduce health risks over an extended period of time requires an estimate of the value of a future life. This in turn requires a discount rate. We suggest and carry out a method to estimate the discount rate using observations on discrete choices between projects with different time horizons. This method is… (More)
We thank Nancy Wallace for helpful comments and criticism.
The disparity between willingness-to-pay and willingness-to-accept, also known as compensation demanded, is a robust experimental finding. Two types of explanations been proposed. The first invokes psychological effects, broadly categorized as reference dependence and loss aversion. The second explanation is that there are large substitution effects but… (More)
This article examines possible explanations for increased utilization of Powder River Basin (PRB) coal in electric power generation that occurred over the last two decades. Did more stringent environmental policy motivate electric power plants to switch to less polluting fuels? Or, did greater use of PRB coal occur because relative price changes altered… (More)
Agile makes a lot of sense to software developers, but selling it to business people can be a tricky task, particularly in a consulting situation. While people appreciate the benefits of Agile, forming a contractual agreement that embraces change is difficult. Target-cost contracts have been suggested as a solution to structuring agile projects; but do they… (More)
The typical model of individual attitudes toward risk-to-life suggests that an individual's willingness to pay for a reduction in mortality risk increases with the baseline risk. The higher-baseline hypothesis has been the subject of several empirical tests but results have so far been mixed. Using survey evidence, we present a situation in which subjects… (More)
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