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Improving the Use of Experimental Auctions in Africa: Theory and Evidence

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  • Morawetz, Ulrich B.
  • De Groote, Hugo
  • Kimenju, Simon Chege

Abstract

Experimental auctions have not been widely used in Africa. However, auctions are important tools for evaluating new products and technologies. To increase the quality of these experiments, we explore an alternative first-price bidding mechanism that is more similar to African market exchanges and we analyze factors likely to affect bidding. Experiments with African consumers show that the proposed first-price mechanism has no advantage over conventional second-price mechanisms. Results show high and significant cash-in-hand, experimenter, and time of day effects in main rounds, and significant ordering effects in test rounds. These effects need to be carefully considered when applying the Becker-DeGroot-Marschak mechanism in Africa.

Suggested Citation

  • Morawetz, Ulrich B. & De Groote, Hugo & Kimenju, Simon Chege, 2011. "Improving the Use of Experimental Auctions in Africa: Theory and Evidence," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(2), pages 1-17, August.
    • Handle: RePEc:ags:jlaare:117161
    DOI: 10.22004/ag.econ.117161
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    8. Alphonce, Roselyne & Alfnes, Frode, 2015. "Eliciting Consumer WTP for Food Characteristics in a Developing Context: Comparison of four methods in a field experiment," Working Paper Series 01-2015, Norwegian University of Life Sciences, School of Economics and Business.
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    16. Chege, C. & Sibiko, K. & Birachi, E. & Jager, M., 2018. "Are Base of Pyramid (BoP) Consumers Willing to Pay for Nutritious Foods? Evidence from Kenya and Uganda," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276021, International Association of Agricultural Economists.
    17. Jaqueline Garcia-Yi, 2014. "Market-Based Instruments for the Conservation of Underutilized Crops: In-Store Experimental Auction of Native Chili Products in Bolivia," Sustainability, MDPI, vol. 6(11), pages 1-19, November.
    18. Simons, Andrew M. & Ahmed, Milkiyas & Blalock, Garrick & Nesin, Bourcard, 2023. "Indigenous bone fertilizer for growth and food security: A local solution to a global challenge," Food Policy, Elsevier, vol. 114(C).
    19. Hugo Groote & Clare Narrod & Simon C. Kimenju & Charles Bett & Rosemarie P. B. Scott & Marites M. Tiongco & Zachary M. Gitonga, 2016. "Measuring rural consumers’ willingness to pay for quality labels using experimental auctions: the case of aflatoxin-free maize in Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 47(1), pages 33-45, January.
    20. Fiamohe, R. & Agossadou, A.J. & Kinkpe, T., 2018. "Contribution of improved processing equipment to rice value chain upgrading in West Africa: Evidence from Benin," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275966, International Association of Agricultural Economists.
    21. Banerji, Abhijit & Birol, Ekin & Karandikar, Bhushana & Rampal, Jeevant, 2016. "Information, branding, certification, and consumer willingness to pay for high-iron pearl millet: Evidence from experimental auctions in Maharashtra, India," Food Policy, Elsevier, vol. 62(C), pages 133-141.

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