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A penny for your thoughts: Inducing truth-telling in stated preference elicitation

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  • Barrage, Lint
  • Lee, Min Sok

Abstract

Contingent valuation often induces hypothetical bias. In a laboratory experiment, we test three calibration mechanisms: cheap-talk, consequentialism, and a new mechanism, the Bayesian truth serum ("BTS"). We apply the BTS in a "faith-based" format: subjects are informed about the purpose and potential efficacy of the BTS, but not its theoretical foundations. We find that real and hypothetical responses differ significantly; real and consequentialist responses are statistically indistinguishable; cheap-talk and the BTS eliminate bias inconsistently; subject characteristics interact significantly with treatment.

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  • Barrage, Lint & Lee, Min Sok, 2010. "A penny for your thoughts: Inducing truth-telling in stated preference elicitation," Economics Letters, Elsevier, vol. 106(2), pages 140-142, February.
  • Handle: RePEc:eee:ecolet:v:106:y:2010:i:2:p:140-142
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    References listed on IDEAS

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    3. Penn, Jerrod & Hu, Wuyang, 2016. "Making the Most of Cheap Talk in an Online Survey," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236171, Agricultural and Applied Economics Association.
    4. Bosworth Ryan & Taylor Laura O., 2012. "Hypothetical Bias in Choice Experiments: Is Cheap Talk Effective at Eliminating Bias on the Intensive and Extensive Margins of Choice?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-28, December.
    5. Ladenburg, Jacob & Olsen, Søren Bøye, 2014. "Augmenting short Cheap Talk scripts with a repeated Opt-Out Reminder in Choice Experiment surveys," Resource and Energy Economics, Elsevier, vol. 37(C), pages 39-63.
    6. Haghani, Milad & Sarvi, Majid, 2018. "Hypothetical bias and decision-rule effect in modelling discrete directional choices," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 361-388.
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    9. Schmidt, Robert J., 2019. "Capitalizing on the (false) consensus effect: Two tractable methods to elicit private information," Working Papers 0669, University of Heidelberg, Department of Economics.
    10. Milad Haghani & Michiel C. J. Bliemer & John M. Rose & Harmen Oppewal & Emily Lancsar, 2021. "Hypothetical bias in stated choice experiments: Part II. Macro-scale analysis of literature and effectiveness of bias mitigation methods," Papers 2102.02945, arXiv.org.
    11. Michal Krawczyk & Anna Kukla-Gryz & Joanna Tyrowicz, 2015. "Digital piracy and the perception of price fairness," Working Papers 2015-24, Faculty of Economic Sciences, University of Warsaw.
    12. Matthew Quaife & Fern Terris-Prestholt & Gian Luca Di Tanna & Peter Vickerman, 2018. "How well do discrete choice experiments predict health choices? A systematic review and meta-analysis of external validity," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(8), pages 1053-1066, November.
    13. Mohammed H. Alemu & Søren B. Olsen, 2017. "Can a Repeated Opt-Out Reminder remove hypothetical bias in discrete choice experiments? An application to consumer valuation of novel food products," IFRO Working Paper 2017/05, University of Copenhagen, Department of Food and Resource Economics.
    14. Sergio Colombo & Wiktor Budziński & Mikołaj Czajkowski & Klaus Glenk, 2020. "Hypothetical bias remains at the heart of controversy about the reliability and validity of value estimates from discrete choice experiments (DCEs). This especially applies to environmental valuation,," Working Papers 2020-20, Faculty of Economic Sciences, University of Warsaw.
    15. Jacob Ladenburg & Jens Olav Dahlgaard & Ole Bonnichsen, 2010. "Testing the Effect of a Short Cheap Talk Script in Choice Experiments," IFRO Working Paper 2010/11, University of Copenhagen, Department of Food and Resource Economics.
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    17. Pierre-Alexandre Mahieu & Romain Crastes & Jordan Louviere & Ewa Zawojska, 2016. "Rewarding truthful-telling in stated preference studies," Working Papers 2016-33, Faculty of Economic Sciences, University of Warsaw.

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