On Price Data Elicitation: a Laboratory Investigation
AbstractThere is abundant literature in experimental research on decision making under risk, which compares, and ranks subjects’ preferences on the basis of some elicitation method. The present paper performs a similar analysis in order to compare them. Since pricing data lead in many cases to some anomalies (i.e. status quo bias endowment effect) we examine three mechanisms to elicit price preferences: willingness-to-pay in a second price auction, willingness-to-accept in a second price auction, and certainty equivalent elicited with BDM. A Bayesian interpretation of our results suggests that it is not possible to state ex-ante the more appropriate elicitation method for a particular subject: for 1/3 of our sample WTP is preferred for 1/3 of our sample WTA is preferred and for the remaining 1/3 BDM is preferred.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 18358.
Date of creation: Oct 2009
Date of revision:
willingness-to-pay; willingness-to-accept; BDM; second price auction;
Other versions of this item:
- Morone, Andrea, 2010. "On price data elicitation: A laboratory investigation," The Journal of Socio-Economics, Elsevier, vol. 39(5), pages 540-545, October.
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-07 (All new papers)
- NEP-CBE-2009-11-07 (Cognitive & Behavioural Economics)
- NEP-EXP-2009-11-07 (Experimental Economics)
- NEP-UPT-2009-11-07 (Utility Models & Prospect Theory)
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