Field Experiments on Anchoring of Economic Valuations
A pillar of behavioral research is the view that preferences are constructed during the value elicitation process, but it is unclear whether, and to what extent, such biases influence real market equilibria. This paper examines the “anchoring” phenomenon in the field. The first experiment produces evidence that inexperienced consumers can be anchored in the value elicitation process, yet there is little evidence that experienced agents are influenced by anchors. The second experiment finds that anchors have only transient effects on prices and quantities traded: aggregate market outcomes converge to the intersection of supply and demand after a few market periods.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.cbpp.uaa.alaska.edu/CBPPHome/DepartmentsandMajors/Economics.aspx|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bateman, Ian J. & Burgess, Diane & Hutchinson, W. George & Matthews, David I., 2008. "Learning design contingent valuation (LDCV): NOAA guidelines, preference learning and coherent arbitrariness," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 127-141, March.
- Bettman, James R & Luce, Mary Frances & Payne, John W, 1998. " Constructive Consumer Choice Processes," Journal of Consumer Research, Oxford University Press, vol. 25(3), pages 187-217, December.
- David Lucking-Reiley & John A. List, 2000.
"Demand Reduction in Multiunit Auctions: Evidence from a Sportscard Field Experiment,"
American Economic Review,
American Economic Association, vol. 90(4), pages 961-972, September.
- David Lucking-Reiley & John List, 2000. "Demand Reduction in Multiunit Auctions: Evidence from a Sportscard Field Experiment," Natural Field Experiments 00520, The Field Experiments Website.
- Holmes Thomas P. & Kramer Randall A., 1995. "An Independent Sample Test of Yea-Saying and Starting Point Bias in Dichotomous-Choice Contingent Valuation," Journal of Environmental Economics and Management, Elsevier, vol. 29(1), pages 121-132, July.
- repec:feb:framed:0070 is not listed on IDEAS
- Vernon L. Smith, 1964. "Effect of Market Organization on Competitive Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 78(2), pages 181-201.
- John A. List & Daniel Millimet, 2004.
"The Market: Catalyst for Rationality and Filter of Irrationality,"
122247000000000023, UCLA Department of Economics.
- List John A. & Millimet Daniel L, 2008. "The Market: Catalyst for Rationality and Filter of Irrationality," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-55, November.
- List, John & Millimet, Daniel, 2005. "The Market: Catalyst for Rationality and Filter of Irrationality," Departmental Working Papers 0504, Southern Methodist University, Department of Economics.
- Daniel Millimet & John List, 2008. "The market: Catalyst for rationality and filter of irrationality," Framed Field Experiments 00179, The Field Experiments Website.
- Dan Ariely & Uri Gneezy & George Loewenstein & Nina Mazar, 2009.
"Large Stakes and Big Mistakes,"
Review of Economic Studies,
Oxford University Press, vol. 76(2), pages 451-469.
- Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-94, September.
- Steven D. Levitt & John A. List, 2007.
"What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?,"
Journal of Economic Perspectives,
American Economic Association, vol. 21(2), pages 153-174, Spring.
- John List & Steven Levitt, 2007. "What do Laboratory Experiments Measuring Social Preferences Reveal About the Real World," Artefactual Field Experiments 00480, The Field Experiments Website.
- John D. Sterman, 1989. "Modeling Managerial Behavior: Misperceptions of Feedback in a Dynamic Decision Making Experiment," Management Science, INFORMS, vol. 35(3), pages 321-339, March.
- Rothschild, Michael, 1973. "Models of Market Organization with Imperfect Information: A Survey," Journal of Political Economy, University of Chicago Press, vol. 81(6), pages 1283-1308, Nov.-Dec..
- Dan Ariely & George Loewenstein & Drazen Prelec, 2003. ""Coherent Arbitrariness": Stable Demand Curves Without Stable Preferences," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 73-106.
- Gode, Dhananjay K & Sunder, Shyam, 1993. "Allocative Efficiency of Markets with Zero-Intelligence Traders: Market as a Partial Substitute for Individual Rationality," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 119-37, February.
- Uri Gneezy & John A. List & George Wu, 2006.
"The Uncertainty Effect: When a Risky Prospect is Valued Less than its Worst Possible Outcome,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 121(4), pages 1283-1309.
- George Wu & John List & Uri Gneezy, 2006. "The uncertainty effect: When a risky prospect is valued less than its worst possible outcome," Framed Field Experiments 00152, The Field Experiments Website.
- Donald Green & Karen Jacowitz & Daniel Kahneman & Daniel McFadden, 1995.
"Referendum Contingent Valuation, Anchoring, and Willingness to Pay for Public Goods,"
_010, University of California at Berkeley, Econometrics Laboratory Software Archive.
- Green, Donald & Jacowitz, Karen E. & Kahneman, Daniel & McFadden, Daniel, 1998. "Referendum contingent valuation, anchoring, and willingness to pay for public goods," Resource and Energy Economics, Elsevier, vol. 20(2), pages 85-116, June.
- Eric J. Johnson & David A. Schkade, 1989. "Bias in Utility Assessments: Further Evidence and Explanations," Management Science, INFORMS, vol. 35(4), pages 406-424, April.
- White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
- Smith, Vernon L, 1976. "Experimental Economics: Induced Value Theory," American Economic Review, American Economic Association, vol. 66(2), pages 274-79, May.
When requesting a correction, please mention this item's handle: RePEc:ala:wpaper:2011-02. 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: (Jonathan Alevy)
If references are entirely missing, you can add them using this form.