Testing competing models of loss aversion: an adversarial collaboration

Ian Bateman, Daniel Kahneman, Alistair Munro, Chris Starmer, Robert Sugden

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92 Citations (Scopus)

Abstract

This paper reports an ‘adversarial collaboration’—a project carried out by two individuals or research groups who, having proposed conflicting hypotheses, seek to resolve their dispute. It describes an experiment which investigates whether, when individuals consider giving up money in exchange for goods, they construe money outlays as losses or as foregone gains. This issue bears on the explanation of the widely observed disparity between willingness-to-pay (WTP) and willingness-to-accept (WTA) valuations of costs and benefits, which has proved problematic for contingent valuation studies. The results of the experiment are broadly consistent with the hypothesis that money outlays are perceived as losses.
Original languageEnglish
Pages (from-to)1561-1580
Number of pages20
JournalJournal of Public Economics
Volume89
Issue number8
DOIs
Publication statusPublished - Aug 2005

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