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On price data elicitation: A laboratory investigation

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  • Morone, Andrea

Abstract

There 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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  • Morone, Andrea, 2010. "On price data elicitation: A laboratory investigation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(5), pages 540-545, October.
  • Handle: RePEc:eee:soceco:v:39:y:2010:i:5:p:540-545
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    Cited by:

    1. Morone, Andrea & Ozdemir, Ozlem, 2012. "Black swan protection: an experimental investigation," MPRA Paper 38842, University Library of Munich, Germany.
    2. Morone, Andrea & Temerario, Tiziana, 2015. "Eliciting Preferences Over Risk: An Experiment," MPRA Paper 68519, University Library of Munich, Germany.
    3. Attema, Arthur E. & Brouwer, Werner B.F., 2012. "A test of independence of discounting from quality of life," Journal of Health Economics, Elsevier, vol. 31(1), pages 22-34.
    4. Stefan Zeisberger & Dennis Vrecko & Thomas Langer, 2012. "Measuring the time stability of Prospect Theory preferences," Theory and Decision, Springer, vol. 72(3), pages 359-386, March.
    5. Ozlem Ozdemir & Andrea Morone, 2014. "An experimental investigation of insurance decisions in low probability and high loss risk situations," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 9(1), pages 53-67, April.
    6. Zonna, Davide, 2016. "Sprechi di cibo e tentativi di riduzione. Un caso sperimentale
      [Avoiding food waste. A field experiment]
      ," MPRA Paper 76097, University Library of Munich, Germany.
    7. Temerario, Tiziana, 2014. "Individual and Group Behaviour Toward Risk: A Short Survey," MPRA Paper 58079, University Library of Munich, Germany.

    More about this item

    Keywords

    Preferences WTP WTA BDM;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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