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Testing Whether Field Auction Experiments Are Demand Revealing in Practice

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Author Info

  • Corrigan, Jay R.
  • Rousu, Matthew C.

Abstract

Recent evidence suggests that participants' misunderstanding of experimental auction mechanism can systematically bias auction results. We present a simple technique for testing whether field auction mechanism and, by extension, whether auction bids provide an unbiased estimate of participants' willingness to pay.

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File URL: http://purl.umn.edu/42464
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Bibliographic Info

Article provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.

Volume (Year): 33 (2008)
Issue (Month): 2 (August)
Pages:

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Handle: RePEc:ags:jlaare:42464

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Web page: http://waeaonline.org/
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Related research

Keywords: Demand revealing; Experimental auctions; Field experiments; Demand and Price Analysis;

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References

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  1. repec:feb:framed:0052 is not listed on IDEAS
  2. Todd L. Cherry & Peter Frykblom & John List & Jason Shogren & Melonie Williams, 2002. "Laboratory Testbeds and Nonmarket Valuation: The Case of Bidding Behavior in a Second Price Auction with an Outside Option," Working Papers 02-13, Department of Economics, Appalachian State University.
  3. Jayson Lusk & T Feldkamp & T Schroeder, 2004. "Experimental auction procedure: Impact on valuation of quality differentiated goods," Artefactual Field Experiments 00097, The Field Experiments Website.
  4. Jayson L. Lusk & John A. Fox & Ted C. Schroeder & James Mintert & Mohammad Koohmaraie, 2001. "In-Store Valuation of Steak Tenderness," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 539-550.
  5. Matthew Rousu & Jay Corrigan, 2008. "Consumer preferences for fair trade foods: Implications for trade policy," Framed Field Experiments 00193, The Field Experiments Website.
  6. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1325-48, December.
  7. Lusk,Jayson L. & Shogren,Jason F., 2007. "Experimental Auctions," Cambridge Books, Cambridge University Press, number 9780521855167, October.
  8. List John A. & Sinha Paramita & Taylor Michael H., 2006. "Using Choice Experiments to Value Non-Market Goods and Services: Evidence from Field Experiments," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(2), pages 1-39, January.
  9. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
  10. Jay Corrigan, 2005. "Is the Experimental Auction a Dynamic Market?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 31(1), pages 35-45, 05.
  11. John A. Fox & Jason F. Shogren & Dermot J. Hayes & James B. Kliebenstein, 1998. "CVM-X: Calibrating Contingent Values with Experimental Auction Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 455-465.
  12. repec:feb:framed:0058 is not listed on IDEAS
  13. List, John A & Shogren, Jason F, 1998. "The Deadweight Loss of Christmas: Comment," American Economic Review, American Economic Association, vol. 88(5), pages 1350-55, December.
  14. repec:feb:framed:0068 is not listed on IDEAS
  15. David Lucking-Reiley & John A. List, 2000. "Demand Reduction in Multiunit Auctions: Evidence from a Sportscard Field Experiment," American Economic Review, American Economic Association, vol. 90(4), pages 961-972, September.
  16. Harrison, Glen W. & Ronald M. Harstad & E. Elisabet Rutström, 1995. "Experimental Methods and Elicitation of Values," Discussion Paper Serie B 349, University of Bonn, Germany.
  17. John A. List, 2002. "Preference Reversals of a Different Kind: The "More Is Less" Phenomenon," American Economic Review, American Economic Association, vol. 92(5), pages 1636-1643, December.
  18. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
  19. repec:feb:artefa:0069 is not listed on IDEAS
  20. Shogren, Jason F. & Cho, Sungwon & Koo, Cannon & List, John & Park, Changwon & Polo, Pablo & Wilhelmi, Robert, 2001. "Auction mechanisms and the measurement of WTP and WTA," Resource and Energy Economics, Elsevier, vol. 23(2), pages 97-109, April.
  21. Lusk, Jayson L. & Hudson, Darren, 2004. "Effect of monitor-subject cheap talk on ultimatum game offers," Journal of Economic Behavior & Organization, Elsevier, vol. 54(3), pages 439-443, July.
  22. John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
  23. John List & M Margolis & Jason Shogren, 1998. "Hypothetical-actual bid calibration of a multi-good auction," Framed Field Experiments 00171, The Field Experiments Website.
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Citations

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Cited by:
  1. Gracia, Azucena & de Magistris, Tiziana & Nayga, Rodolfo M., Jr., 2011. "Willingness to pay for a local food label for lamb meat in Spain," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114607, European Association of Agricultural Economists.
  2. Demont, Matty & Zossou, Esperance & Rutsaert, Pieter & Ndour, Maimouna & Mele, Paul Van & Verbeke, Wim, 2011. "Willingness to Pay for Enhanced Food Quality: Rice Parboiling in Benin," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114443, European Association of Agricultural Economists.
  3. Demont, Matty & Rutsaert, Pieter & Ndour, Maimouna & Verbeke, Wim & Seck, Papa Abdoulaye & Tollens, Eric, 2012. "Experimental auctions, collective induction and choice shift: Willingness-to-pay for rice quality in Senegal," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126861, International Association of Agricultural Economists.
  4. Diederich, Johannes & Goeschl, Timo, 2011. "Giving in a Large Economy: Price vs. Non-Price Effects in a Field Experiment," Working Papers 0514, University of Heidelberg, Department of Economics.
  5. Bernard, John C. & He, Na, 2010. "Confounded by the Field: Bidding in Food Auctions When Field Prices Are Increasing," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(2), April.
  6. Rousu, Matthew C. & Nonnemaker, James & Farrelly, Matthew, 2011. "Choosing a Cigarette Brand: Determining the Value of Countermarketing Information to Smokers Using Field Auctions," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 43(04), November.
  7. Thrasher, James F. & Rousu, Matthew C. & Hammond, David & Navarro, Ashley & Corrigan, Jay R., 2011. "Estimating the impact of pictorial health warnings and "plain" cigarette packaging: Evidence from experimental auctions among adult smokers in the United States," Health Policy, Elsevier, vol. 102(1), pages 41-48, September.
  8. Demont, Matty & Rutsaert, Pieter & Ndour, Maimouna & Verbeke, Wim, 2013. "Reversing Urban Bias in African Rice Markets: Evidence from Senegal," World Development, Elsevier, vol. 45(C), pages 63-74.
  9. Johannes Diederich & Timo Goeschl, 2013. "To Give or Not to Give: The Price of Contributing and the Provision of Public Goods," NBER Working Papers 19332, National Bureau of Economic Research, Inc.
  10. Shi, Lijia & House, Lisa & Gao, Zhifeng, 2012. "Consumers’ Willingness-to-pay for Organic and Local Blueberries: A Multi-store BDM Auction Controlling for Purchase Intentions," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124998, Agricultural and Applied Economics Association.

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