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On the Use of the BDM Mechanism in Non-Hypothetical Choice Experiments

Author

Listed:
  • Bazzani, Claudia
  • Nayga, Rodolfo M. Jr.
  • Caputo, Vincenzina
  • Canavari, Maurizio
  • Danforth, Diana M.

Abstract

To potentially reduce bias in hypothetical choice experiments, many studies have incentivized respondents to reveal more truthful choices by randomly choosing a binding choice set and then asking them to pay the price indicated for the chosen product alternative in this binding choice set. This approach, however, does not separate the price the respondent indicated he/she is willing to pay for the chosen product alternative from the price that he/she will end up paying. Would the use of the Becker-DeGroot-Marshack (BDM) mechanism make non-hypothetical choice experiments more demand revealing? Our results using a conventional homegrown choice experiment and an induced value choice experiment suggest that it does not. Choice behavior is associated with the degree of understanding about the experimental procedures and the amount of time devoted to examine the choice set.

Suggested Citation

  • Bazzani, Claudia & Nayga, Rodolfo M. Jr. & Caputo, Vincenzina & Canavari, Maurizio & Danforth, Diana M., 2016. "On the Use of the BDM Mechanism in Non-Hypothetical Choice Experiments," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235904, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:235904
    DOI: 10.22004/ag.econ.235904
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