Honey, Mugs and Caricatures: anchors on prices of consumer goods only hold hypothetically

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

No 2020-40, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: We elicit willingness to pay for different types of consumption goods, systematically manipulating irrelevant anchors (high vs. low) and incentives to provide true valuations (hypothetical vs. real). On top of a strong hypothetical bias, we find that anchors only make a substantial, significant difference in the case of hypothetical data, the first experiments to directly document such an interaction. This finding suggests that hypothetical market research methods may deliver lower quality data. Moreover, it contributes to the discussion examining the mechanism underlying the anchoring effect, suggesting it could partly be caused by insufficient conscious efforts to drift away from the anchor.

Keywords: anchoring effect; hypothetical bias; WTP; experiment (search for similar items in EconPapers)
JEL-codes: C93 D91 M31 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2020-40

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