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Testing Willingness to Pay Elicitation Mechanisms in the Field: Evidence from Uganda

Author

Listed:
  • Burchardi, Konrad

    (Institute for International Economic Studies, Stockholm University, BREAD, CEPR, CESifo, ThReD)

  • de Quidt, Jonathan

    (Institute for International Economic Studies, Stockholm University, CAGE, CEPR, CESifo, ThReD)

  • Gulesci, Selim

    (Trinity College, Dublin, BREAD, CEPR, EUDN, J-PAL, LEAP)

  • Lerva, Benedetta

    (Mistra Center for Sustainable Markets, Stockholm)

  • Tripodi, Stefano

    (Department of Economics, Copenhagen Business School)

Abstract

Researchers frequently use variants of the Becker-DeGroot-Marschak (BDM) mechanism to elicit willingness to pay (WTP). These variants involve numerous incentive-irrelevant design choices, some of which carry advantages for implementation but may deteriorate participant comprehension or trust in the mechanism, which are well-known problems with the BDM. We highlight three such features and test them in the field in rural Uganda, a relevant population for many recent applications. Comprehension is very high, and 86 percent of participants bid optimally for an induced-value voucher, with little variation across treatments. This gives confidence for similar applications, and suggests the comprehension-expediency trade-off is mild.

Suggested Citation

  • Burchardi, Konrad & de Quidt, Jonathan & Gulesci, Selim & Lerva, Benedetta & Tripodi, Stefano, 2021. "Testing Willingness to Pay Elicitation Mechanisms in the Field: Evidence from Uganda," CAGE Online Working Paper Series 541, Competitive Advantage in the Global Economy (CAGE).
  • Handle: RePEc:cge:wacage:541
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    References listed on IDEAS

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    Cited by:

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    2. Cano, Alexander & Cortes, Darwin & Mantilla, Cesar & Prada-Medina, Laura & Restrepo, Medardo, 2022. "The trade-off between liquidity and insurance: voucher payments in a lab-in-the-field experiment with Colombian rural workers," OSF Preprints 8ft4e, Center for Open Science.
    3. Diekert, Florian & Eymess, Tillmann & Goeschl, Timo & Gómez-Cardona, Santiago & Luomba, Joseph, 2022. "Subsidizing Compliance: A Multi-Unit Price List Mechanism for Legal Fishing Nets at Lake Victoria," Working Papers 0711, University of Heidelberg, Department of Economics.
    4. Carolyn Predmore & Kudret Topyan & Lauren Trabold Apadula, 2021. "Impact of Process Misconception in Becker-DeGroot-Marschak Single Response Value Elicitation Procedures: An Experimental Investigation in Consumer Behavior Using the IKEA Effect," Economies, MDPI, vol. 9(4), pages 1-13, November.

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    Keywords

    JEL Classification: C90; C93; D44; O12;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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