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Preference Elicitation under Oath

  • Nicolas Jacquemet

    ()

    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)

  • Robert-Vincent Joule

    ()

    (LPS-AIX - Laboratoire de Psychologie Sociale - Université de Provence - Aix-Marseille I : EA849)

  • Stephane Luchini

    ()

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - École des Hautes Études en Sciences Sociales (EHESS) - CNRS : UMR7316)

  • Jason Shogren

    ()

    (Departement of Economics and Finance, University of Wyoming - University of Wyoming)

Eliciting sincere preferences for non-market goods remain a challenge due to the discrepency between hypothetical and real behavior and false zeros. The gap arises because people either overstate hypothetical values or understate real commitments or a combination of both. Herein we examine whether the traditional real-world institution of the solemn oath can improve preference elicitation. Applying the social psychology theory on the oath as a truth-telling-commitment device, we ask our bidders to swear on their honour to give honest answers prior to participating in an incentive-compatible second-price auction. The oath is an ancillary mechanism to commit bidders to bid sincerely in a second-price auction. Results from our induced valuation testbed treatments suggest that the oath-only auctions outperform all our other auctions (real and hypothetical). In our homegrown valuation treatments eliciting preferences for dolphin protection, the oath-only design induced people to treat as binding both their experimental budget constraint (i.e., lower values on the high end of the value distribution) and participation constraint (i.e., positive values in place of the zero bids used to opt-out of auction). Based on companion treatments, we show the oath works through an increase in the willingness to tell the truth, due to a strengthening of the intrinsic motivation to do so.

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File URL: http://halshs.archives-ouvertes.fr/docs/00/73/12/44/PDF/OathII-WP.pdf
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Paper provided by HAL in its series PSE - Labex "OSE-Ouvrir la Science Economique" with number halshs-00731244.

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Date of creation: Jan 2013
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Publication status: Published, Journal of Environmental Economics and Management, 2013, 65, 1, 110-132
Handle: RePEc:hal:pseose:halshs-00731244
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00731244
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  1. Nicolas Jacquemet & Alexander James & Stephane Luchini & Jason Shogren, 2010. "Referenda under Oath," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00490448, HAL.
  2. Shogren, Jason F. & Shin, Seung Youll & Hayes, Dermot J. & Kliebenstein, James, 1994. "Resolving Differences in Willingness to Pay and Willingness to Accept," Staff General Research Papers 701, Iowa State University, Department of Economics.
  3. Laura O. Taylor & Ronald G. Cummings, 1999. "Unbiased Value Estimates for Environmental Goods: A Cheap Talk Design for the Contingent Valuation Method," American Economic Review, American Economic Association, vol. 89(3), pages 649-665, June.
  4. Nicolas Jacquemet & Stephane Luchini & Robert-Vincent Joule & Jason Shogren, 2008. "Earned Wealth, Engaged Bidders? Evidence from a second price auction," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00277283, HAL.
  5. Nicolas Jacquemet & Robert-Vincent Joule & Stephane Luchini & Jason Shogren, 2009. "Earned wealth, engaged bidders? Evidence from a second price auction," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00429894, HAL.
  6. Friedel Bolle & Matthew Braham, . "A Difficulty with Oaths: On Trust, Trustworthiness, and Signalling," German Working Papers in Law and Economics 2003-1-1055, Berkeley Electronic Press.
  7. Jack Knetsch & Fang-Fang Tang & Richard Thaler, 2001. "The Endowment Effect and Repeated Market Trials: Is the Vickrey Auction Demand Revealing?," Experimental Economics, Springer, vol. 4(3), pages 257-269, December.
  8. Shogren, Jason F. & Margolis, Michael & Koo, Cannon & List, John A., 2001. "A random nth-price auction," Journal of Economic Behavior & Organization, Elsevier, vol. 46(4), pages 409-421, December.
  9. James Andreoni & B. Douglas Bernheim, 2009. "Social Image and the 50-50 Norm: A Theoretical and Experimental Analysis of Audience Effects," Econometrica, Econometric Society, vol. 77(5), pages 1607-1636, 09.
  10. Jacquemet, Nicolas & Joule, Robert-Vincent & Luchini, Stéphane & Shogren, Jason F., 2009. "Earned wealth, engaged bidders? Evidence from a second-price auction," Economics Letters, Elsevier, vol. 105(1), pages 36-38, October.
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