Without urgent repairs, the iconic Sydney Opera House will collapse. Sydneysiders were asked two questions in a survey.

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answerhappygod
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Without urgent repairs, the iconic Sydney Opera House will collapse. Sydneysiders were asked two questions in a survey.

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Without urgent repairs, the iconic Sydney Opera House willcollapse. Sydneysiders were asked two questions in a survey.
Question 1: What is the maximum amount you would bewilling to pay to prevent the collapse of the Sydney Opera House?The survey result was $500 per person (on average).
Question 2: If the Sydney Opera House were to collapse,what is the minimum compensation you would accept for the loss ofthis building? The survey result was $200 per person (onaverage).
Are the people answering this survey thinking rationally(from a neoclassical economist’s perspective)? Why? How might abehavioural economist explain the differences in theirresponses?
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