Hypothetical bias and framing effect in the valuation of private consumer goods

Magdalena Brzozowicz ()
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Magdalena Brzozowicz: University of Warsaw, Faculty of Economic Sciences

No 2018-23, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: In the laboratory experiment, I examine two behavioral effects: hypothetical bias and the framing effect. I elicited willingness to pay (WTP) for a cosmetic product, and manipulated framing conditions (positive vs. negative attribute framing) and incentives to reveal the actual valuation (hypothetical vs. real). In this case, I demonstrated that hypothetical bias has a significant impact on WTP values; however, the framing effect has no effect on valuation of the product. Similarly, I found no interaction between the two effects. This observation contributes to claims that hypothetical research methods lead to equally reliable data as those based on consequential choices.

Keywords: framing effect; hypothetical bias; laboratory experiment (search for similar items in EconPapers)
JEL-codes: C91 D91 M31 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2018
New Economics Papers: this item is included in nep-exp, nep-mkt and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2018-23

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