IDEAS home Printed from https://ideas.repec.org/a/eee/jeeman/v65y2013i1p110-132.html
   My bibliography  Save this article

Preference elicitation under oath

Author

Listed:
  • Jacquemet, Nicolas
  • Joule, Robert-Vincent
  • Luchini, Stéphane
  • Shogren, Jason F.

Abstract

Eliciting sincere preferences for non-market goods remain a challenge due to the discrepency between hypothetical and real behavior and false zeros. The gap arises because people either overstate hypothetical values or understate real commitments or a combination of both. Herein we examine whether the traditional real-world institution of the solemn oath can improve preference elicitation. Applying the social psychology theory on the oath as a truth-telling-commitment device, we ask our bidders to swear on their honour to give honest answers prior to participating in an incentive-compatible second-price auction. The oath is an ancillary mechanism to commit bidders to bid sincerely in a second-price auction. Results from our induced valuation testbed treatments suggest that the oath-only auctions outperform all our other auctions (real and hypothetical). In our homegrown valuation treatments eliciting preferences for dolphin protection, the oath-only design induced people to treat as binding both their experimental budget constraint (i.e., lower values on the high end of the value distribution) and participation constraint (i.e., positive values in place of the zero bids used to opt-out of auction). Based on companion treatments, we show the oath works through an increase in the willingness to tell the truth, due to a strengthening of the intrinsic motivation to do so.

Suggested Citation

  • Jacquemet, Nicolas & Joule, Robert-Vincent & Luchini, Stéphane & Shogren, Jason F., 2013. "Preference elicitation under oath," Journal of Environmental Economics and Management, Elsevier, vol. 65(1), pages 110-132.
  • Handle: RePEc:eee:jeeman:v:65:y:2013:i:1:p:110-132
    DOI: 10.1016/j.jeem.2012.05.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0095069612000587
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dufwenberg, Martin & Gneezy, Uri, 2000. "Measuring Beliefs in an Experimental Lost Wallet Game," Games and Economic Behavior, Elsevier, vol. 30(2), pages 163-182, February.
    2. Nicolas Jacquemet & Stephane Luchini & Robert-Vincent Joule & Jason Shogren, 2008. "Earned Wealth, Engaged Bidders? Evidence from a second price auction," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00277283, HAL.
    3. Shogren, Jason F. & Seung Y. Shin & Dermot J. Hayes & James B. Kliebenstein, 1994. "Resolving Differences in Willingness to Pay and Willingness to Accept," American Economic Review, American Economic Association, vol. 84(1), pages 255-270, March.
    4. Shogren, Jason F. & Margolis, Michael & Koo, Cannon & List, John A., 2001. "A random nth-price auction," Journal of Economic Behavior & Organization, Elsevier, vol. 46(4), pages 409-421, December.
    5. repec:dau:papers:123456789/9717 is not listed on IDEAS
    6. Charness, Gary & Dufwenberg, Martin, 2003. "Promises & Partnership," Research Papers in Economics 2003:3, Stockholm University, Department of Economics.
    7. JAMES G. MacKINNON, 2006. "Bootstrap Methods in Econometrics," The Economic Record, The Economic Society of Australia, vol. 82(s1), pages 2-18, September.
    8. Nicolas Jacquemet & Robert‐Vincent Joule & Stéphane Luchini & Jason F. Shogren, 2011. "Do People Always Pay Less Than They Say? Testbed Laboratory Experiments with IV and HG Values," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(5), pages 857-882, October.
    9. Nicolas Jacquemet & Alexander James & Stephane Luchini & Jason Shogren, 2010. "Social psychology and environmental economics : a new look at ex ante corrections of biased preference evaluation," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00462193, HAL.
    10. List, John A. & Shogren, Jason F., 1998. "Calibration of the difference between actual and hypothetical valuations in a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 37(2), pages 193-205, October.
    11. Aadland, David & Caplan, Arthur J., 2006. "Cheap talk reconsidered: New evidence from CVM," Journal of Economic Behavior & Organization, Elsevier, vol. 60(4), pages 562-578, August.
    12. Tore Ellingsen & Magnus Johannesson, 2004. "Promises, Threats and Fairness," Economic Journal, Royal Economic Society, vol. 114(495), pages 397-420, April.
    13. Nicolas Jacquemet & Alexander James & Stéphane Luchini & Jason Shogren, 2011. "Social Psychology and Environmental Economics: A New Look at ex ante Corrections of Biased Preference Evaluation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(3), pages 413-433, March.
    14. Joseph Henrich & Steve J. Heine & Ara Norenzayan, 2010. "The Weirdest People in the World?," Working Paper Series of the German Council for Social and Economic Data 139, German Council for Social and Economic Data (RatSWD).
    15. Todd L. Cherry & Peter Frykblom & Jason F. Shogren, 2002. "Hardnose the Dictator," American Economic Review, American Economic Association, vol. 92(4), pages 1218-1221, September.
    16. Laura O. Taylor & Ronald G. Cummings, 1999. "Unbiased Value Estimates for Environmental Goods: A Cheap Talk Design for the Contingent Valuation Method," American Economic Review, American Economic Association, vol. 89(3), pages 649-665, June.
    17. James Andreoni & B. Douglas Bernheim, 2009. "Social Image and the 50-50 Norm: A Theoretical and Experimental Analysis of Audience Effects," Econometrica, Econometric Society, vol. 77(5), pages 1607-1636, September.
    18. John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
    19. Cummings, Ronald G, et al, 1997. "Are Hypothetical Referenda Incentive Compatible?," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 609-621, June.
    20. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, March.
    21. Matthew Braham & Friedel Bolle, 2006. "A difficulty with oaths: On trust, trustworthiness, and signalling," European Journal of Law and Economics, Springer, vol. 22(3), pages 219-232, November.
    22. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
    23. Jacquemet, Nicolas & Joule, Robert-Vincent & Luchini, Stéphane & Shogren, Jason F., 2009. "Earned wealth, engaged bidders? Evidence from a second-price auction," Economics Letters, Elsevier, vol. 105(1), pages 36-38, October.
    24. Mariah D. Ehmke & Jayson L. Lusk & John A. List, 2008. "Is Hypothetical Bias a Universal Phenomenon? A Multinational Investigation," Land Economics, University of Wisconsin Press, vol. 84(3), pages 489-500.
    25. Gary Charness & Martin Dufwenberg, 2006. "Promises and Partnership," Econometrica, Econometric Society, vol. 74(6), pages 1579-1601, November.
    26. James Murphy & P. Allen & Thomas Stevens & Darryl Weatherhead, 2005. "A Meta-analysis of Hypothetical Bias in Stated Preference Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, March.
    27. Nicolas Jacquemet & Alexander James & Stéphane Luchini & Jason F. Shogren, 2017. "Referenda Under Oath," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(3), pages 479-504, July.
    28. David L. Dickinson, 2004. "Negative Values in Vickrey Auctions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 222-235.
    29. Jack Knetsch & Fang-Fang Tang & Richard Thaler, 2001. "The Endowment Effect and Repeated Market Trials: Is the Vickrey Auction Demand Revealing?," Experimental Economics, Springer;Economic Science Association, vol. 4(3), pages 257-269, December.
    30. Mark Morrison & Thomas Brown, 2009. "Testing the Effectiveness of Certainty Scales, Cheap Talk, and Dissonance-Minimization in Reducing Hypothetical Bias in Contingent Valuation Studies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 44(3), pages 307-326, November.
    31. Todd Cherry & Peter Frykblom & Jason Shogren & John List & Melonie Sullivan, 2004. "Laboratory Testbeds and Non-Market Valuation: The Case of Bidding Behavior in a Second-Price Auction with an Outside Option," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 29(3), pages 285-294, November.
    32. Pierpaolo Battigalli & Martin Dufwenberg, 2007. "Guilt in Games," American Economic Review, American Economic Association, vol. 97(2), pages 170-176, May.
    33. Fredrik Carlsson, 2010. "Design of Stated Preference Surveys: Is There More to Learn from Behavioral Economics?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(2), pages 167-177, June.
    34. repec:hal:journl:halshs-00429894 is not listed on IDEAS
    35. Nicolas Jacquemet & Alexander James & Stephane Luchini & Jason Shogren, 2010. "Referenda under Oath," Working Papers halshs-00490448, HAL.
    36. David Aadland & Arthur J. Caplan, 2003. "Willingness to Pay for Curbside Recycling with Detection and Mitigation of Hypothetical Bias," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 492-502.
    37. Nicolas Jacquemet & Alexander James & Stephane Luchini & Jason Shogren, 2010. "Referenda under Oath," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00490448, HAL.
    38. Karen Blumenschein & GlennC. Blomquist & Magnus Johannesson & Nancy Horn & Patricia Freeman, 2008. "Eliciting Willingness to Pay Without Bias: Evidence from a Field Experiment," Economic Journal, Royal Economic Society, vol. 118(525), pages 114-137, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Oath; Commitment; Vickrey auction; Hypothetical bias; Induced values; Homegrown values;

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • H4 - Public Economics - - Publicly Provided Goods
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeeman:v:65:y:2013:i:1:p:110-132. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/622870 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.