Hypothetical Bias Mitigation in Choice Experiments: Effectiveness of Cheap Talk and Honesty Priming Fade with Repeated Choices

2015 ◽  
Author(s):  
Gregory Howard ◽  
Brian E. Roe ◽  
Erik C. Nisbet ◽  
Jay Martin
Keyword(s):  
Cheap Talk ◽  
Choice Experiments ◽  
Hypothetical Bias

scholarly journals Comparing treatments to reduce hypothetical bias in choice experiments regarding organic food

2020 ◽  
Vol 47 (3) ◽  
pp. 1302-1337 ◽  
Author(s):  
Adelina Gschwandtner ◽  
Michael Burton
Keyword(s):  
Willingness To Pay ◽  
Stated Preference ◽  
Organic Food ◽  
Cheap Talk ◽  
Food Products ◽  
Choice Experiments ◽  
Hypothetical Bias ◽  
Stated Preference Methods ◽  
The Uk

Abstract Hypothetical bias is one of the strongest criticisms brought to stated preference methods. We evaluate and compare the use of Cheap Talk and Honesty Priming as methods to mitigate such bias. Our study analyses the demand for organic food products in the UK, and the results reveal a core of consumers with positive willingness to pay (WTP) for organic. However, when correcting for hypothetical bias, consumers appear to be willing to pay even more for other attributes. Most importantly, the results show that implementing mechanisms to correct for hypothetical bias are efficient to reduce WTP, with Cheap Talk having a higher overall significance than Honesty Priming.

Hypothetical Bias in Choice Experiments: Is Cheap Talk Effective at Eliminating Bias on the Intensive and Extensive Margins of Choice?

2012 ◽  
Vol 12 (1) ◽  
Author(s):  
Ryan Bosworth ◽  
Laura O. Taylor
Keyword(s):  
Experimental Design ◽  
Willingness To Pay ◽  
Experimental Approach ◽  
Cheap Talk ◽  
Choice Experiments ◽  
Nonmarket Valuation ◽  
Hypothetical Bias ◽  
Extensive Margin ◽  
Empirical Regularities ◽  
Do So

Abstract We use an experimental approach to evaluate the effectiveness of the most commonly employed bias-mitigation tool in nonmarket valuation surveys: the cheap talk script. Our experimental design allows us to estimate treatment effects on two margins of choice separately: the decision to enter the market at all (the extensive margin) and the choices among alternatives offered (the intensive margin). The key result of this study is to show that a cheap talk script appears to affect both margins in ways distinctly different than when choices involve actual payments. Specifically, participants in hypothetical choice experiments including cheap talk are more inclined to enter the market but are also more price-sensitive as compared to when payments are real. Interestingly, the average influence of cheap talk on market participation and price-sensitiveness could result in total willingness to pay (WTP) estimates that are similar to real payment treatments since the two effects identified act in opposite directions when computing WTP. However, they may do so by inducing behavior that is distinctly different than those of consumers facing real choices. Our results highlight that future reliance on cheap talk as a bias mitigation tool requires extensive testing for empirical regularities to gain any confidence that the tool can be effective, and under what circumstances.

scholarly journals Using Choice Experiments to Value Non-Market Goods and Services: Evidence from Field Experiments

2006 ◽  
Vol 5 (2) ◽  
Author(s):  
John A. List ◽  
Paramita Sinha ◽  
Michael H. Taylor
Keyword(s):  
Field Experiments ◽  
Stated Preference ◽  
Empirical Work ◽  
Cheap Talk ◽  
Choice Experiments ◽  
Economic Benefits ◽  
Hypothetical Bias ◽  
Purchase Decision ◽  
Goods And Services ◽  
Consumption Decisions

Abstract Critics of stated preference methods argue that hypothetical bias precludes survey techniques from providing reliable economic values for non-market goods and services, rendering estimation of the total economic benefits of public programs fruitless. This paper explores a relatively new methodology to obtain the total value of non-market goods and services—choice experiments—which conveniently provide information on the purchase decision as well as the characteristic value vector. The empirical work revolves around examining behavior in two very different field settings. In the first field study, we explore hypothetical bias in the purchase decision by eliciting contributions for a threshold public good in an actual capital campaign. To extend the analysis a level deeper, in a second field experiment we examine both the purchase decision and the marginal value vector via inspection of consumption decisions in an actual marketplace. In support of the new valuation design, both field experiments provide some evidence that hypothetical choice experiments combined with “cheap talk” can yield credible estimates of the purchase decision. Furthermore, we find no evidence of hypothetical bias when estimating marginal attribute values. Yet, we do find that the “cheap talk” component might induce internal inconsistency of subjects’ preferences in the choice experiment.

scholarly journals Incentive Compatible Referenda and the Valuation of Environmental Goods

1998 ◽  
Vol 27 (2) ◽  
pp. 132-139 ◽  
Author(s):  
Laura O. Taylor
Keyword(s):  
Willingness To Pay ◽  
Contingent Valuation ◽  
Contingent Valuation Method ◽  
Experimental Tests ◽  
Choice Experiments ◽  
Hypothetical Bias ◽  
The Real ◽  
Environmental Goods ◽  
Incentive Compatible ◽  
Valuation Method

Recent attempts to test the validity of the contingent valuation method have relied on laboratory-type experiments. In these experiments, willingness to pay responses in hypothetical choice experiments are compared with responses from choice experiments requiring actual payments. Often evidence of hypothetical bias is found. Critical for these experimental tests of hypothetical surveys is that the methodology used to elicit willingness to pay from subjects in the real-payment experiment be demand revealing. If it is not, then differences in responses to hypothetical and real valuation questions could be due to free-riding in the real-payment survey and not due to hypothetical bias in the hypothetical survey. This paper reports on experiments that implement a theoretically incentive-compatible revelation mechanism (a closed referendum) to elicit responses to valuation questions in both hypothetical and real experiments. As in earlier studies, evidence of an upward hypothetical bias is found.

On the Use of Honesty Priming Tasks to Mitigate Hypothetical Bias in Choice Experiments

2013 ◽  
Vol 95 (5) ◽  
pp. 1136-1154 ◽  
Author(s):  
Tiziana de-Magistris ◽  
Azucena Gracia ◽  
Rodolfo M. Nayga
Keyword(s):  
Choice Experiments ◽  
Hypothetical Bias
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