An Experimental Investigation of the Disparity between WTA and WTP for Lotteries

In this paper we experimentally investigate the disparity between willingness-to-accept (WTA) and willingness-to-pay (WTP) for risky lotteries. The direction of the income effect is reversed by endowing subjects with the highest price of a lottery when asking the WTP question. Our results show that the income effect is too small to be the only source of the disparity. Since the disparity concentrates on a subsample of subjects, parametric and nonparametric tests of the WTA-WTP ratio may lead to contradictory results. The disparity is significantly reduced when background risk is introduced. That is, putting subjects always into a risky position could improve the contingent valuation method which is often concerned with the assessment of risky situations such as health risks, automobile safety, etc. --WTA-WTP disparity,lotteries,background risk,contingent valuation

Fivebrane Instanton Corrections to the Universal Hypermultiplet

We analyze the Neveu-Schwarz fivebrane instanton in type IIA string theory compactifications on rigid Calabi-Yau threefolds, in the low-energy supergravity approximation. It there appears as a finite action solution to the Euclidean equations of motion of a double-tensor multiplet (dual to the universal hypermultiplet) coupled to N=2, D=4 supergravity. We determine the bosonic and fermionic zero modes, and the single-centered instanton measure on the moduli space of collective coordinates. The results are then used to compute, in the semiclassical approximation, correlation functions that nonperturbatively correct the universal hypermultiplet moduli space geometry of the low-energy effective action. We find that only the Ramond-Ramond sector receives corrections, and we discuss the breaking of isometries due to instantons.Comment: 48 pages, v2: improved version with some correction