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Darren Dahl (Editor in Chief)Eileen FischerGita JoharVicki Morwitz

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Overestimating Others’ Willingness to Pay

Shane Frederick
DOI: http://dx.doi.org/10.1086/662060 1-21 First published online: 1 June 2012

Abstract

This article documents a widespread bias: a tendency to overestimate how much others will pay for goods. The effect may influence pricing and negotiations, which depend on accurate assessments of others’ valuations. It is also shown to underlie or interact with several widely researched behavioral phenomena, including egocentric empathy gaps, the endowment effect, and the false-consensus effect.

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