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Why do we overestimate others’ willingness to pay?

In this WPA, we will analyze data from Matthews et al. (2016): Why do we overestimate others’ willingness to pay? The purpose of this research was to test if our beliefs about other people’s affluence (i.e.; wealth) affect how much we think they will be willing to pay for items. You can find the full paper at http://journal.sjdm.org/15/15909/jdm15909.pdf.

Study 1

In this WPA, we will analyze data from their first study. In study 1, participants indicated the proportion of other people taking part in the survey who have more than themselves, and then whether other people would be willing to pay more than them for each of 10 items.

The following table shows a table of the 10 projects and proportion of participants who indicated that others would be more willing to pay for the product than themselves (Table 1 in Matthews et al., 2016).

Product Number Product Reported p(other > self)
1 A freshly-squeezed glass of apple juice .695
2 A Parker ballpoint pen .863
3 A pair of Bose noise-cancelling headphones .705
4 A voucher giving dinner for two at Applebee’s .853
5 A 16 oz jar of Planters dry-roasted peanuts .774
6 A one-month movie pass .800
7 An Ikea desk lamp .863
8 A Casio digital watch .900
9 A large, ripe pineapple .674
10 A handmade wooden chess set .732

Table 1: Proportion of participants who indicated that the “typical participant” would pay more than they would for each product in Study 1.