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Preference Learning in Consecutive Experimental Auctions

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  • Dermot Hayes
  • John List
  • Jason Shogren

Abstract

This paper explores the origins of the strikingly high price premia paid for new food products in lab valuation exercises. Our experimental design distinguishes between two explanations of this phenomenon: novelty of the experimental experience versus the novelty of the good, i.e., preference learning-bids reflect a person's desire to learn how an unfamiliar good fits into their preference set. Subjects bid in four consecutive experimental auctions for three goods that vary in familiarity, candy bars, mangos, and irradiated meat. Our results suggest that preference learning is the main source of the high premia, and that novelty of the experimental experience does not in itself artificially inflate valuations.

Suggested Citation

  • Dermot Hayes & John List & Jason Shogren, 2000. "Preference Learning in Consecutive Experimental Auctions," Artefactual Field Experiments 00519, The Field Experiments Website.
  • Handle: RePEc:feb:artefa:00519
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    1. Roosen, Jutta & Fox, John A. & Hennessy, David A. & Schreiber, Alan, 1998. "Consumers' Valuation Of Insecticide Use Restrictions: An Application To Apples," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(02), December.
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