This study compares a real choice experiment (RCE) with three commonly used experimental auction (EA) mechanisms (Becker-DeGroot-Marschak, random nth price auction (RNPA), second price auction (SPA)) to determine whether willingness to pay (WTP) estimates differ across these elicitation methods. We use quality labels on eggs as the empirical application and find that the SPA, RNPA and RCE yield similar WTP estimates, while the BDM mechanism generally produces higher WTP estimates. We also compare these EAs and the RCE in an induced value setting and find that the BDM auction produces greater deviations from the underlying value than the other EAs and RCE. We suggest that RCEs may be preferable to BDMs for collecting WTP estimates in logistically difficult experimental settings.
Comparing experimental auctions and real choice experiments in food choice: a homegrown and induced value analysis
Bazzani, C
2023-01-01
Abstract
This study compares a real choice experiment (RCE) with three commonly used experimental auction (EA) mechanisms (Becker-DeGroot-Marschak, random nth price auction (RNPA), second price auction (SPA)) to determine whether willingness to pay (WTP) estimates differ across these elicitation methods. We use quality labels on eggs as the empirical application and find that the SPA, RNPA and RCE yield similar WTP estimates, while the BDM mechanism generally produces higher WTP estimates. We also compare these EAs and the RCE in an induced value setting and find that the BDM auction produces greater deviations from the underlying value than the other EAs and RCE. We suggest that RCEs may be preferable to BDMs for collecting WTP estimates in logistically difficult experimental settings.
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