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Honey, Mugs and Caricatures: anchors on prices of consumer goods only hold hypothetically

Author

Listed:
  • Magdalena Brzozowicz

    (Faculty of Economic Sciences, University of Warsaw)

  • Michał Krawczyk

    (Faculty of Economic Sciences, University of Warsaw)

Abstract

We elicit willingness to pay for different types of consumption goods, systematically manipulating irrelevant anchors (high vs. low) and incentives to provide true valuations (hypothetical vs. real). On top of a strong hypothetical bias, we find that anchors only make a substantial, significant difference in the case of hypothetical data, the first experiments to directly document such an interaction. This finding suggests that hypothetical market research methods may deliver lower quality data. Moreover, it contributes to the discussion examining the mechanism underlying the anchoring effect, suggesting it could partly be caused by insufficient conscious efforts to drift away from the anchor.

Suggested Citation

  • Magdalena Brzozowicz & Michał Krawczyk, 2020. "Honey, Mugs and Caricatures: anchors on prices of consumer goods only hold hypothetically," Working Papers 2020-40, Faculty of Economic Sciences, University of Warsaw.
    • Handle: RePEc:war:wpaper:2020-40
    as

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    File URL: https://www.wne.uw.edu.pl/index.php/download_file/6086/
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    anchoring effect; hypothetical bias; WTP; experiment;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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