Testing commitment cost in food choices: a non-hypothetical choice experiment approach

Claudia Bazzani, Vincenzina Caputo, Rodolfo Nayga and Maurizio Canavari

No 205235, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: Choice experiments (CE) are one of the most popular preference elicitation mechanisms used by applied economists. In CEs, respondents are normally asked to make choices at the moment they are asked to do so. They are also based on the assumption that the decision maker has access to and makes use of all relevant information concerning the good of interest when making their choices. However, real world choices are usually made in a dynamic context where individuals have the option to delay or reserve a transaction due to, among others, uncertainty about the product. So committing a decision at the present under conditions of uncertainty for the value of the good might have a cost (i.e., commitment cost). In this paper, we test commitment cost theory in a non-hypothetical choice experiment. Specifically, we test the possibility that gaining information about the product either at the present or in the future and the possibility of reversing the transaction in the future can influence choice behavior and WTP estimates. Our results partially support the Commitment Cost theory, suggesting that the construction of a dynamic decision context (i.e., reversibility of transaction) is important in choice experimental designs.

Keywords: Agricultural and Food Policy; Institutional and Behavioral Economics; Marketing (search for similar items in EconPapers)
Pages: 29
Date: 2015-05-25
New Economics Papers: this item is included in nep-dcm, nep-exp and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:205235

DOI: 10.22004/ag.econ.205235

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