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A game of two halves? Incentive incompatibility, starting point bias and the bidding game contingent valuation method

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  • Paul McNamee

    (Health Economics Research Unit, Institute of Applied Health Sciences, University of Aberdeen, Aberdeen, UK)

  • Laura Ternent

    (Health Economics Research Unit, Institute of Applied Health Sciences, University of Aberdeen, Aberdeen, UK)

  • Adjima Gbangou

    (Centre de Recherche en Sante de Nouna (CRSN), Nouna, Burkina Faso)

  • David Newlands

    (Aberdeen Business School, University of Aberdeen, UK)

Abstract

The bidding game (BG) method of contingent valuation is one way to increase the precision of willingness to pay (WTP) estimates relative to the single dichotomous choice approach. However, there is evidence that the method may lead to incentive incompatible responses and be associated with starting point bias. While previous studies in health using BGs test for starting point bias, none have also investigated incentive incompatibility. Using a sample of respondents resident in Burkina Faso, West Africa, this paper examines whether the BG method is associated with both incentive incompatibility and starting point bias. We find evidence for both effects. However, average WTP values remained largely unaffected after accounting for both factors in multivariate analyses. The results suggest that the BG method is an acceptable technique in settings where prices for goods are flexible. Copyright © 2009 John Wiley & Sons, Ltd.

Suggested Citation

  • Paul McNamee & Laura Ternent & Adjima Gbangou & David Newlands, 2010. "A game of two halves? Incentive incompatibility, starting point bias and the bidding game contingent valuation method," Health Economics, John Wiley & Sons, Ltd., vol. 19(1), pages 75-87.
  • Handle: RePEc:wly:hlthec:v:19:y:2010:i:1:p:75-87
    DOI: 10.1002/hec.1448
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    References listed on IDEAS

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    1. Farr, Marina & Stoeckl, Natalie & Alam Beg, Rabiul, 2014. "The non-consumptive (tourism) ‘value’ of marine species in the Northern section of the Great Barrier Reef," Marine Policy, Elsevier, vol. 43(C), pages 89-103.
    2. Jacopo Bonan & Philippe LeMay-Boucher & Michel Tenikue, 2014. "Households' Willingness to Pay for Health Microinsurance and its Impact on Actual Take-up: Results from a Field Experiment in Senegal," Journal of Development Studies, Taylor & Francis Journals, vol. 50(10), pages 1445-1462, November.
    3. Shono, Aiko & Kondo, Masahide & Ohmae, Hiroshi & Okubo, Ichiro, 2014. "Willingness to pay for public health services in rural Central Java, Indonesia: Methodological considerations when using the contingent valuation method," Social Science & Medicine, Elsevier, vol. 110(C), pages 31-40.

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