Information and the divergence between willingness to accept and willingness to pay

Article Abstract:

A theoretical bidding model with costly information acquisition was created to explain the divergence between willingness to accept compensation to give up a good and willingness to pay to obtain a good. Compared with the two commonly invoked theoretical explanations, namely the endowment effect and the substitution effect, the theoretical bidding model developed performs better in explaining empirical and experimental data. The model shows that the divergence between the two increases when the information acquisition cost is greater.

Research, Purchasing, Selling

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Adjustments costs from environmental change

Article Abstract:

The implications of environmental changes on the adjustment costs, which are changed without the knowledge of firm, are analyzed.

Venture Analysis, Evaluation, Environmental aspects, Business enterprises, Habitat (Ecology), Habitat modification

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