Incentive compatibility and respondent beliefs: Consequentiality and game form

Daniel Rondeau () and Christian Vossler
Additional contact information
Daniel Rondeau: University of Victoria, https://web.uvic.ca/~rondeau/

No 2024-02, Working Papers from University of Tennessee, Department of Economics

Abstract: Answers to valuation questions in stated preference surveys can be analyzed as economic decisions only if respondents believe their choice(s) are consequential (i.e., can affect their welfare). The empirical evidence we review indicates that the information content of surveys can significantly influence consequentiality beliefs, and controlling for beliefs can impact welfare estimates and improve validity. The review also uncovers several opportunities to improve upon current practices. First, most surveys do not deploy incentive compatible mechanisms that provide respondents with the correct incentives to truthfully reveal their preferences. Second, existing consequentiality measures do not fully capture consequentiality and are challenging to interpret. Finally, studies do not generally measure or control for other beliefs required to ensure that estimated value are consistent with economic theory. Hence, we provide a theoretical framework that links incentive compatibility conditions to a respondent’s beliefs about these conditions. This motivates a theory-driven proposal to improve belief elicitation and foster greater validity of survey results.

Keywords: Stated Preferences; Consequentiality; Incentive Compatibility; Mechanism Design; Belief Elicitation; Validity (search for similar items in EconPapers)
JEL-codes: H21 H23 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2024-06
New Economics Papers: this item is included in nep-dcm, nep-gth and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://web.utk.edu/~jhollad3/RePEc/2024-02.pdf First version, 2024 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ten:wpaper:2024-02_1

Access Statistics for this paper

More papers in Working Papers from University of Tennessee, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Scott Holladay ().