publication . Article . Preprint . 2015

Relative willingness to pay and surplus comparison mechanism in experimental auctions

Combris, Pierre; Giraud-Heraud, Eric; Seabra Pinto, Alexandra;
Open Access English
  • Published: 01 Jan 2015
  • Publisher: HAL CCSD
  • Country: Morocco
Abstract
We study the relative willingness-to-pay (WTP) of consumers according to the diversity of supply in a market and we show how the presence of substitutes for a given product leads to question the incentive mechanisms commonly used in experimental auctions. We propose a Surplus Comparison Mechanism (SCM) in order to yield WTP estimates which better take into account the choice set available to consumers. After showing the efficiency of this mechanism we test the SCM in a laboratory experiment, reconsidering WTP for food environmental certifications (Integrated Pest Management and Organic certification). It appears that WTPs are decreasing when more alternative cer...
Subjects
free text keywords: Experimental Auctions, Willingness to pay, Consumers’ surplus, Choice alternatives, Food certification., [SHS]Humanities and Social Sciences, [SDV.IDA]Life Sciences [q-bio]/Food engineering, [SPI.GPROC]Engineering Sciences [physics]/Chemical and Process Engineering, jel:C91, jel:D44, jel:Q51

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