scholarly journals Hypothetical Bias for Private Goods: Does Cheap Talk Make a Difference?

2015 ◽  
Vol 05 (06) ◽  
pp. 749-756 ◽  
Author(s):  
Maurice Doyon ◽  
Laure Saulais ◽  
Bernard Ruffieux ◽  
Denise Bweli
Keyword(s):  
Cheap Talk ◽  
Hypothetical Bias ◽  
Private Goods

Videos Improve Attention and Cheap Talk in Online Surveys

2021 ◽  
Vol 16 (2) ◽  
pp. 347-376
Author(s):  
Jerrod Penn ◽  
◽  
Wuyang Hu ◽  
Keyword(s):  
Willingness To Pay ◽  
Choice Experiment ◽  
Stated Preference ◽  
Cheap Talk ◽  
Hypothetical Bias ◽  
Control Group ◽  
Online Surveys ◽  
Participant Engagement ◽  
Reducing Potential

Cheap Talk (CT) is a mainstay technique among stated preference practitioners to reduce Hypothetical Bias (HB). The usefulness of CT may be questionable in online surveys due to the limited control researchers have on participant engagement. In the context of an online choice experiment on hotels, we compare a control group of respondents who receives a CT script as a traditional passage of text versus a group who must answer an attention-check question to verify their comprehension of the script as well as another group who receives the CT script as a video and then answer the attention-check question. We find that compared to the control group, simply offering the attention-check question reduced willingness to pay (WTP), and those who answer the attention-check question correctly behaved differently to those who did not. Overall, video CT script is shown to improve attention and be more effective in reducing potential HB than a text-based script.

scholarly journals A Comparison of Approaches to Mitigate Hypothetical Bias

2009 ◽  
Vol 38 (2) ◽  
pp. 166-180 ◽  
Author(s):  
Patricia A. Champ ◽  
Rebecca Moore ◽  
Richard C. Bishop
Keyword(s):  
Willingness To Pay ◽  
Contingent Valuation ◽  
Study Design ◽  
Cheap Talk ◽  
Hypothetical Bias

We compare two approaches to mitigating hypothetical bias. The study design includes three treatments: an actual payment treatment, a contingent valuation (CV) treatment with a follow-up certainty question, and a CV treatment with a cheap talk script. Our results suggest that both the follow-up certainty treatment and the cheap talk treatment produce willingness-to-pay (WTP) estimates consistent with the actual payment treatment. However, the follow-up certainty treatment provides response distributions at all offer amounts that are statistically similar to the actual payment treatment, while the cheap talk treatment provides similar responses only at some offer amounts. Furthermore, the cheap talk treatment is effective only for inexperienced individuals. We conclude that the follow-up certainty approach is more consistent than the cheap talk approach for eliminating 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.

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