 The impact of deal†proneness on WTP estimates in incentive†aligned value elicitation methodsLijia Shi, Jing Xie and Zhifeng Gao Agricultural Economics, 2018, vol. 49, issue 3, 353-362 Abstract: Even after controlling for hypothetical biases, some incentive†aligned value elicitation methods still produce different willingness†to†pay (WTP) estimates. In this study, we compare WTP estimates from three incentive†aligned value elicitation methods: real choice experiment (RCE), real double†bounded dichotomous contingent valuation (RCVM), and Becker–DeGroot–Marschak auction (BDM). We find that participants’ aggressiveness in obtaining low prices (i.e., “deal†proneness†) influences WTP estimates in the BDM auction, but not those elicited from the RCE and RCVM. The participants with higher levels of deal†proneness tend to submit lower bids in the BDM auction. The discrepancies in WTP estimates between different incentive†aligned procedures are narrower for participants with lower levels of deal†proneness. Our results indicate that the bids in BDM auctions may be understated and the auction mechanism may induce the “gambling behavior†of people who are deal†prone. That is, whether the BDM auction is truly incentive†aligned is again called into question. We also discuss the practical implications for food retailers. Date: 2018 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:agecon:v:49:y:2018:i:3:p:353-362 Ordering information: This journal article can be ordered from Access Statistics for this article Agricultural Economics is currently edited by W.A. Masters and G.E. Shively More articles in Agricultural Economics from International Association of Agricultural Economists Contact information at EDIRC. |
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