Convergence theorems of willingness-to-pay and willingness-to-accept for nonmarket goods

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4 Citations (Scopus)

Abstract

This paper shows that the disparity between an agent's willingness-to-pay and willingness-to-accept for a nonmarket good becomes small and the two values converge to the same limit only if the agent's initial consumption level of the numéraire is large enough. A necessary and sufficient condition for convergences is provided, and a formula is provided to compute the limit value directly from a utility function. These convergence results are derived when the nonmarket goods are indivisible and qualitatively differentiated, and then extended for the divisible case.

Original languageEnglish
Pages (from-to)549-570
Number of pages22
JournalSocial Choice and Welfare
Volume34
Issue number4
DOIs
Publication statusPublished - 2010

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)
  • Economics and Econometrics

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