Experimental Methods and Elicitation of Values

Hypothetical Bias in Dichotomous Choice Contingent Valuation Studies

“…List and Gallet 2001 Another key difference is the existence of a market price for private goods. Both Harrison, et al 2002 andStevens 2004 hypothesize that responses to actual payment questions for private goods may be censored by the market price; however, in an induced value setting, Cherry, et al 2004 do not find any differences in bid shaving between actual and hypothetical treatments when subjects have the outside option of purchasing a perfect substitute.…”

Implementing the efficient auction: initial results from the lab

“…1 Lab auctions have been used to value neoteric agricultural and commercial products prior to field marketing such as genetically modified products, irradiated food products, safer food, growth-hormone-treated meat and dairy products, vacuum-packaged meat, and fresh foods and produce (see Shogren, 2004, for an overview). Affiliation might arise in these repeated auctions if posted prices transform independent private values into affiliated values because the prices signal potential common outside options or commonly perceived, but unknown, characteristics of the product (Harrison et al, 1995). 2 Truthful bidding is the weakly dominant strategy.…”

Short communication. Bid affiliation in repeated random nth price auction

“…Repeated trial auctions are normally used for the purpose of market learning 1 and to enhance equilibrium behavior 2 . However, as mentioned by Harrison et al (2004), bidders who are unfamiliar with the auctioned product or uncertain about the price of the good that can be purchased outside of the experimental auctions take the posted prices as signals of what the good should be worth to them. The debate on the use of repeated rounds with price feedback has not been settled.…”

“…They found that posting of the clearing prices heavily increased the bids for all the auctioned products and concluded that market learning is responsible for this bidding behaviour. Harrison et al (2004) reanalysed the data in Hoffman et al (1993) who carried out a field experiment (Vickrey auction) where participants bid for beef steaks in two alternative retail packages. They found signif icant effects of the lagged prices and argued that such effects were due to aff iliation.…”

“…They showed that posted prices have a statistically and economically significant effect on subjects' bids in subsequent rounds for both familiar and unfamiliar products. As in Harrison et al (2004) and Bernard (2005), they suggested abandoning the use of repeatedtrial auctions and suggested the use of single-trial Vickrey auctions that are preceded by a learning period where the researcher can clearly explain the auction mechanism and carry out a practical example with an unrelated product to the subjects.…”