The Role of Confidence in Truthful Revelation of Private Values

Gregory M. Parkhurst and Clifford Nowell

Agricultural and Resource Economics Review, 2014, vol. 43, issue 2, 16

Abstract: Recent research shows that disparities between willingness to pay (WTP) and willingness to accept (WTA) disappear with market experience and training. In effect, preferences can be refined by eliminating subjects’ misconceptions regarding elicitation procedures. We use a stated measure of confidence as a proxy for misconceptions and test the influence of confidence on truthful revelation of induced values in WTP and WTA auctions using the Becker-DeGroot-Marschak (BDM) mechanism. The results indicate that confidence matters for buyers and sellers. With confidence, WTA and WTP measures converge, and people with greater confidence choose the dominant bidding strategy more frequently.

Keywords: Agricultural and Food Policy; Consumer/Household Economics; Demand and Price Analysis; Environmental Economics and Policy; Food Consumption/Nutrition/Food Safety; Institutional and Behavioral Economics; Research Methods/Statistical Methods; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Date: 2014
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Journal Article: The Role of Confidence in Truthful Revelation of Private Values (2014)
Journal Article: The Role of Confidence in Truthful Revelation of Private Values (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:arerjl:180413

DOI: 10.22004/ag.econ.180413

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