On the Use of Virtual Reality in Mitigating Hypothetical Bias in Choice Experiments

Choice experiments have been extensively used in many stated preference studies and disciplines. Inorder to give external validity to stated preferences, participants must behave the same in an experi-ment setting as they do in reality. The difference between a decision made in a real experiment and ahypothetical experiment is commonly attributed to “hypothetical bias.” In this paper, we investigatewhether virtual reality can reduce hypothetical bias in choice experiments. We conducted a set ofexperiments using the Food and Drug Administration’s new Nutrition Facts Label for yogurts. Partic-ipants were randomly assigned to non-hypothetical and hypothetical experiments, which differed interms of visual presentations of the product in question: text, picture, and a virtual grocery store. Giventhe absence of real markets for the new label at the time of the research, we approximate the real mar-ket with a binding choice in our non-hypothetical experiments. Our results suggest that although thehypothetical bias with virtual reality is not statistically signicantly different from those using text orpicture, it is the smallest. Among participants who did not exhibit high simulator discomfort, resultssuggest that virtual reality can signicantly reduce hypothetical bias in choice experiments.