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http://hdl.handle.net/10419/4098
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| Title: | | Noise and bias in eliciting preferences  |
| Authors: | | Hey, John Denis Morone, Andrea Schmidt, Ulrich |
| Issue Date: | | 2007 |
| Series/Report no.: | | Kieler Arbeitspapiere 1386 |
| Abstract: | | In the context of eliciting preferences for decision making under risk, we ask the question: "which might be the 'best' method for eliciting such preferences?". It is well known that different methods differ in terms of the bias in the elicitation; it is rather less well-known that different methods differ in terms of their noisiness. The optimal trade-off depends upon the relative magnitudes of these two effects. We examine four different elicitation mechanisms (pairwise choice, willingness-to-pay, willingness-to-accept, and certainty equivalents) and estimate both effects. Our results suggest that economists might be better advised to use what appears to be a relatively inefficient elicitation technique (i.e. pairwise choice) in order to avoid the bias in better-known and more widely-used techniques. |
| Subjects: | | Pairwise choice WTP WTA Errors Noise Biases |
| JEL: | | C91 C81 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des IfW Economists Online Kieler Arbeitspapiere, IfW
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