Abstract :
This is an empirical, experimental investigation of the
value of information, as perceived through the willingness
to purchase information (WTP) and the willingness
to sell it (accept payment, WTA). We examined the
effects of source nature: expertise versus content, and
source status: copy versus exclusive original of information
on the WTA–WTP ratio. In an animated computer
simulation of a business game, players could maximize
their profits by making choices regarding inventory and
prices. Participants were offered the chance to bid for
buying or selling information regarding the weather
that may affect demand. We find, as hypothesized, that
the subjective value of information does indeed follow
the predictions of endowment effect theory. The ratio of
willingness to accept to willingness to purchase
(WTA–WTP) recorded for the 294 subjects resembles
the ratio common for private goods, rather than the
intuitively expected unity. The WTA–WTP ratios diverged
from unity more often and in a more pronounced manner
for information traded in the “original” form rather than
as a copy of the original, although even for copies the
WTA–WTP ratio is still double. The results yield a value
of about three for the WTA–WTP ratio for original information
whether the source is content or expertise. Copy
information received a subjective value that was significantly
different (lower) than original information. The
implications for both online trading and online sharing
of information are discussed.
