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What floats your boat? Preference revelation from lotteries over complex goods

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Listed:
  • Jonathan K. Yoder
  • Adrienne M. Ohler
  • Hayley H. Chouinard

    () (School of Economic Sciences, Washington State University)

Abstract

A lottery that provides participants the opportunity to choose among a set of simple gambles over multi-attribute goods results in an endogenous distribution of win rates over gambles that reflects tradeoffs between the relative desirability of the available goods and the probability of winning. These win rates provide sufficient information to estimate hedonic prices, marginal utility, and marginal rates of substitution among attributes. We develop a model for mapping preferences from this information set and apply it to Idaho’s Four Rivers Whitewater Recreation Lottery. This lottery structure shows promise as a foundation for economic experiments for preference revelation.

Suggested Citation

  • Jonathan K. Yoder & Adrienne M. Ohler & Hayley H. Chouinard, 2012. "What floats your boat? Preference revelation from lotteries over complex goods," Working Papers 2012-4, School of Economic Sciences, Washington State University.
  • Handle: RePEc:wsu:wpaper:yoder-11
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    References listed on IDEAS

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    Keywords

    lotteries; complex goods; hedonic pricing; choice under uncertainty;

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources

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