Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/111237
Authors: 
Bartling, Björn
Engl, Florian
Weber, Roberto
Year of Publication: 
2015
Series/Report no.: 
Working Paper Series, University of Zurich, Department of Economics 180
Abstract: 
Cason and Plott (2014) show that subjects' misconception about the incentive properties of the Becker-DeGroot-Marschak (BDM) value elicitation procedure can generate data patterns that look like - and might thus be misinterpreted as evidence for - preferences constructed from endowments or reference points. We test whether game form misconceptions are necessary to produce willingness-to-pay (WTP) vs. willingness-to-accept (WTA) gaps in a valuation experiment in which subjects are randomly assigned to the role of either buyer or seller. We employ a design that allows us to identify whether a subject understood the incentive properties of a price-list version of the BDM mechanism. We find a robust WTP-WTA gap, even among subjects whose elicited valuations for a good of induced and known monetary value and whose ability to identify the payoffs resulting from their choices indicate an understanding of the incentive properties of the BDM mechanism. We conclude that game form misconceptions are not a necessary condition for the emergence of WTP-WTA gaps.
Subjects: 
WTP-WTA gap
game from misconception
BDM mechanism
endowment effect
experimental methods
highly replicable laboratory environment
JEL: 
C91
D03
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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