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
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...
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

Alfnes, F. (2009), “Valuing product attributes in Vickrey auctions when market substitutes are available”, European Review of Agricultural Economics, Vol 36 (2), 133-149. [OpenAIRE]

Bazerman, M., Moore, D., Tenbrunsel, A., Wade-Benzoni, K., Blount, S. (1999), “Explaining how preferences change across joint versus separate evaluation”, Journal of Economic Behavior & Organization, Vol. 39 (1999) 41-58.

Bazoche, P., Combris, P., Giraud-Héraud, E., Seabra Pinto , A. , Bunte, F. Tsakiridou, E. (2013), “Willingness to pay for pesticide reduction in the EU: nothing but organic?”, European Review of Agricultural Economics, 1-23.

Bordalo, P., Gennaioli, N., Shleifer, A. (2013), "Salience and Consumer Choice," Journal of Political Economy, University of Chicago Press, vol. 121(5), 803 - 843. [OpenAIRE]

Cohen J., Basu, K. (1987), “Alternative Models of Categorization : Toward a contingent Processing Framework”, Journal of Consumer Research, vol 13.

Horowitz, J.K. (2006), “The Becker-DeGroot-Marschak mechanism is not necessarily incentive compatible, even for non-random goods”, Economic Letters, 93, 6-11.

Huber, J., Payne, J.W., Puto, C. (1982), “Adding asymmetrically dominated alternatives: Violations of regularity and the similarity hypothesis”, The Journal of consumer research, 9 (1), 90 Kahneman, D., Tversky, A. (1979), “Prospect theory: An analysis of decision under risk”, Econometrica, 47, 263-291.

List, J. (2002), “Preferences Reversals of a Different Kind: The “More Is Less” Phenomenon”, The American Economic Review, vol 92, N°5, 1636-1643.

Lusk, J., House, L., Valli, C., Jaeger, S., Moore, M., Morrow, B., Traill, W.B. (2005) “Consumer welfare effects of introducing and labelling genetically modified food”, Economics Letters, 88, 382-388. [OpenAIRE]

Lusk, J.L., Feldkamp, T., and Schroeder, T., (2004), “Experimental Auction Procedure: Impact on Valuation of Quality Differentiated Goods”, American Journal of Agricultural Economics, 86 (2), 389-405. [OpenAIRE]

Lusk, J.L., Jamal, M., Kurlander, L., Roucan, M., Taulman, L. (2005) “A meta-analysis of genetically modified food valuation studies”, Journal of Agricultural and Resource Economics, 30, 28-44.

Mussa, M, Rosen, S. (1978), “Monopoly and product quality”, Journal of Economic Theory, Volume 18, Issue 2, August 1978, 301-317.

Noussair, C., Robin, S., Ruffieux, B. (2004), “Do consumers really refuse to buy genetically modified food?”, The Economic Journal,114, 102-120.

Pothos, E.M., Wills, A.J. (2011), “Formal approaches in categorization”, Cambridge University Press, 308p.

Powered by OpenAIRE Research Graph
Any information missing or wrong?Report an Issue