The Role of Confidence in Truthful Revelation of Private Values Reportar como inadecuado

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Recent research shows that disparities between willingness to pay (WTP) and willingness to accept (WTA) disappear with market experience and training. In effect, preferences can be refined by eliminating subjects’ misconceptions regarding elicitation procedures. We use a stated measure of confidence as a proxy for misconceptions and test the influence of confidence on truthful revelation of induced values in WTP and WTA auctions using the Becker-DeGroot-Marschak (BDM) mechanism. The results indicate that confidence matters for buyers and sellers. With confidence, WTA and WTP measures converge, and people with greater confidence choose the dominant bidding strategy more frequently.

Keywords: BDM ; Becker-DeGroot-Marschak mechanism ; confidence ; induced value ; truthful revelation ; willingness to accept ; willingness to pay

Subject(s): Agricultural and Food Policy

Consumer/Household Economics

Demand and Price Analysis

Environmental Economics and Policy

Food Consumption/Nutrition/Food Safety

Institutional and Behavioral Economics

Research Methods/ Statistical Methods

Resource /Energy Economics and Policy

Issue Date: 2014-08

Publication Type: Journal Article

PURL Identifier: Published in: Agricultural and Resource Economics Review, Volume 43, Number 2 Page range: 193-208

Total Pages: 16

Record appears in: Northeastern Agricultural and Resource Economics Association (NAREA) > Agricultural and Resource Economics Review

Autor: Parkhurst, Gregory M. ; Nowell, Clifford


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