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A Belief‐Preference Model of Choice for Experience and Credence Goods

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  • Marco Costanigro
  • Yuko Onozaka

Abstract

We develop a methodology addressing the issue of confounded beliefs and preferences in models of discrete choice. First, we formalise the theoretical framework and logical underpinnings of a belief‐preference model of choice for experience and credence goods, where subjective beliefs relate to uncertain product quality. We then present the experimental procedure within the context of an online choice experiment studying consumer food preferences. The empirical strategy leverages information from a quality sorting task to identify and estimate beliefs, while choice data are used to recover preferences. By conditioning product choices on predicted quality perceptions, the issue of endogenous beliefs is resolved.

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  • Marco Costanigro & Yuko Onozaka, 2020. "A Belief‐Preference Model of Choice for Experience and Credence Goods," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(1), pages 70-95, February.
  • Handle: RePEc:bla:jageco:v:71:y:2020:i:1:p:70-95
    DOI: 10.1111/1477-9552.12334
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    1. Onozaka, Yuko & Saue, Vegar Veseth & Costanigro, Marco, 2018. "The Moderating Effect of Heterogeneous Beliefs on Consumer Preferences for a New Food Technology: The Case of Modified Atmospheric Packaging," 2018 Annual Meeting, August 5-7, Washington, D.C. 274068, Agricultural and Applied Economics Association.

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