The Subjective Value of Information: An experimental comparison of willingness to purchase or sell information

The Subjective Value of Information: An experimental comparison of willingness to purchase or sell information

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by Sheizaf Rafaeli , Daphne R. Raban

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Datum	Value	Source
TITLE	The Subjective Value of Information: An experimental comparison of willingness to purchase or sell information	user correction - Legacy Corrections
AUTHOR NAME	Sheizaf Rafaeli	user correction - Legacy Corrections
AUTHOR AFFIL	Graduate School of Business; University of Haifa	user correction - Legacy Corrections
AUTHOR ADDR	Haifa 31905; Israel	user correction - Legacy Corrections
AUTHOR NAME	Daphne R. Raban	user correction - Legacy Corrections
AUTHOR AFFIL	Graduate School of Business; University of Haifa	user correction - Legacy Corrections
AUTHOR ADDR	Haifa 31905; Israel	user correction - Legacy Corrections
ABSTRACT	Subjective valuations determine the demand for information. Users formulated value judgments regarding information are important for the design of information systems. This paper focuses on information as content. We begin with the "Endowment Effect" extension of "Prospect Theory". In a simple computer simulated business game, two groups of fourteen and seventeen participants simulated a management task in which they were provided opportunities to buy or sell information. The bidding mechanism was incentive compatible. Results show that, in agreement with Endowment Effect theory, people value information they own much more than information not owned by them. Our findings indicate a place for the subjective value of information on the WTA/WTP ratio continuum that emerges from pertinent literature. The ratio for information is similar to that of market goods. Participants had a strong inclination to purchase but not to sell information although the profit data suggests that the use of information had no objective benefit for profit-making. This preference is attributed to risk aversion rather than to loss aversion which is the most widely-accepted explanation of the Endowment Effect. 3	user correction - Legacy Corrections
CITATIONS	46 found	ParsCit 1.0