Do you do what you say or do you do what you say others do?
AbstractWe design a donations vs. own money choice experiment comparing three different treatments. In two of the treatments the pay-offs are hypothetical. In the first of these, a short cheap talk script was used, and subjects were required to state their own preferences in this scenario. In the second, subjects were asked to state how they believed an average student would respond to the choices. In the third treatment the pay-offs were real, allowing us to use the results to compare the validity of the two hypothetical treatments. We find a strong hypothetical bias in both hypothetical treatments where the marginal willingness to pay for donations are higher when subjects state their own preferences but lower when subjects state what they believe are other students preferences. The explanation is probably a self-image effect in both cases. We find that it is mainly women who are prone to hypothetical bias in this study.
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Bibliographic InfoPaper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 309.
Length: 22 pages
Date of creation: 12 Jun 2008
Date of revision:
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Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
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Stated preferences; cheap talk; hypothetical bias; third person approach; choice experiment;
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-06-21 (All new papers)
- NEP-CBE-2008-06-21 (Cognitive & Behavioural Economics)
- NEP-DCM-2008-06-21 (Discrete Choice Models)
- NEP-EXP-2008-06-21 (Experimental Economics)
- NEP-LTV-2008-06-21 (Unemployment, Inequality & Poverty)
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