Description acceptable. He, Anderson, and Rucker claimed that “direct” and “indirect” factors affect this quantity in a paper developing a “comparative method of valuation” to measure it. To measure this quantity, Becker, DeGroot, and Marschak developed an incentive-compatible method equivalent to a Vickrey auction against an unknown bidder. If u(w, x) (“u of w comma x”) is a utility function, where x is a dummy variable corresponding to an undesired feature, then this quantity equals u(w0, 1) (“u of w-nought comma 1”). The income effect is often cited to explain why this quantity is finite, but a related quantity is infinite. This quantity corresponds to the (*) consumer reservation price. This quantity is smaller than a related quantity in the endowment effect. It’s not demand, but this quantity minus price equals consumer surplus. For 10 points, name this quantity, the maximum a consumer would give up to obtain a good. ■END■
ANSWER: willingness to pay [or WTP; accept descriptions of how much someone is willing to pay or how much someone would want to pay for something; accept consumer reservation price before read; prompt on reservation price before read; prompt on valuation; reject “demand”; reject “willingness to accept” or “WTA”]
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= Average correct buzz position