A Two-Step Auction in the Presence of Negative Values: An Application to â€œFarm-Raisedâ€ Pre-Cooked Roast Beef
Uniform auctions are commonly used to elicit willingness to pay for new or novel products, product attributes, or non-market goods. However, most auctions or other contingent-valuation techniques do not allow for negative values, despite the fact that many consumers hold negative values for these products or product attributes. We conducted a WTP auction for a new product along with a within-sample WTA second auction allowing for negative responses. We find that failing to allow for negative values significantly inflates willingness to pay estimates and estimates of expected market share. This paper provides a method of incorporating negative values into auctions and willingness to pay elicitation.
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- Jason F. Shogren & John A. Fox & Dermot J. Hayes & Jutta Roosen, 1999.
"Observed Choices for Food Safety in Retail, Survey, and Auction Markets,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 81(5), pages 1192-1199.
- Shogren, Jason F. & Fox, John A. & Hayes, Dermot J. & Roosen, Jutta, 1999. "Observed Choices For Food Safety in Retail, Survey and Auction Markets," Staff General Research Papers 5024, Iowa State University, Department of Economics.
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