Essays in the measurement of consumer preferences in experimental auction markets

John Fox

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: This thesis applies a relatively new technique, laboratory experimental auctions, to examine consumer preferences for food products which have not yet reached the market. The auction used is a second-price (Vickrey) auction in which the highest bidder pays an amount equal to the second-highest bid. This auction has been shown to accurately reveal preferences because it eliminates the incentive to underbid true value which is present in a first-price auction;The experimental auction is used to examine preferences for two products; milk from cows treated with bovine somatotropin, and pork treated with irradiation. The applications feature real products, real money, and an explicit obligation to consume a food product. These features provide for elicitation of preferences in a non-hypothetical setting; the idea is to replicate the consumers decision environment when first faced with these new products in the grocery store;The three papers use experimental auctions to examine: (1) the relationship between preferences for irradiated pork as revealed in a hypothetical survey and those revealed in the non-hypothetical experimental auction, (2) the impact of favorable and unfavorable descriptions of food irradiation on preferences for irradiated pork, and (3) regional differences in preferences for milk produced with or without bovine somatotropin, and the impact of a detailed description of bovine somatotropin on preferences.

Date: 1994-01-01
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Citations: View citations in EconPapers (4)

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