Preference Elicitation under Oath
AbstractEliciting sincere preferences for non-market goods remains a challenge due to hypothetical bias - the so-called gap between hypothetical monetary values and real economic commitments. The gap arises because people either overstate hypothetical values or understate real commitments or a combination of both. Herein we examine whether the traditional real-world institution of the solenn oath can improve preference elicitation. Applying the social psychology theory on the oath as a truth-telling-commitment device, we ask our bidders to swear on their honour to give honest answers prior to participating in an incentive-compatible second-price auction. Results from our induced valuation testbed treatments suggest the oath-only auctions outperform all other auctions (real, hypothetical, and real-with-oath). In our homegrown valuation treatments eliciting preferences for dolphin protection, the oath-only design induced people to treat as binding both their budget constraint (i.e., lower values on the high end of the value distribution) and participation constraint (i.e., positive values rather than zero bids used to opt out of auction). Our oath-only results are robust to extra training on the auction and to consequential wording about the reason for the oath.
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Date of creation: Jun 2009
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Oath; commitment; Vickrey auction; hypothetical bias; induced values; homegrown values.;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-08-02 (All new papers)
- NEP-EXP-2009-08-02 (Experimental Economics)
- NEP-UPT-2009-08-02 (Utility Models & Prospect Theory)
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