Eliciting willingness-to-pay to decompose beliefs and preferences that determine selection into competition in lab experiments

Yvonne Chen, Deniz Dutz, Li Li, Sarah Moon, Edward Vytlacil and Songfa Zhong

Journal of Econometrics, 2024, vol. 243, issue 1

Abstract: This paper develops a partial-identification methodology for analyzing self-selection into alternative compensation schemes in a laboratory environment. We formulate a model of self-selection in which individuals select the compensation scheme with the largest expected valuation, which depends on individual- and scheme-specific beliefs and non-monetary preferences. We characterize the resulting sharp identified sets for individual-specific willingness-to-pay, subjective beliefs, and preferences, and develop conditions on the experimental design under which these identified sets are informative. We apply our methods to examine gender differences in preference for winner-take-all compensation schemes. We find that what has commonly been attributed to a gender difference in preference for performing in a competition is instead explained by men being more confident than women in their probability of winning a future (though not necessarily a past) competition.

Keywords: Elicitation; Partial identification; Experiment; Gender difference (search for similar items in EconPapers)
JEL-codes: C25 C91 J16 J31 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Eliciting Willingness-to-Pay to Decompose Beliefs and Preferences that Determine Selection into Competition in Lab Experiments (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:econom:v:243:y:2024:i:1:s0304407623003688

DOI: 10.1016/j.jeconom.2023.105652

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