Abstract
Why elicit values? The prices observed on a market reflect, on a good competitive day, the equilibrium of marginal valuations and costs. They do not quantitatively reflect the infra-marginal or extra-marginal values, other than in a severely censored sense. We know that infra-marginal values are weakly higher, and extra-marginal values are weakly lower, but beyond that one must rely on functional forms to extrapolate. For policy purposes this is generally insufficient to undertake cost-benefit calculations.
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Harrison, G.W. (2010). value elicitation. In: Durlauf, S.N., Blume, L.E. (eds) Behavioural and Experimental Economics. The New Palgrave Economics Collection. Palgrave Macmillan, London. https://doi.org/10.1057/9780230280786_33
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DOI: https://doi.org/10.1057/9780230280786_33
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