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Testing Whether Field Auction Experiments Are Demand Revealing in Practice

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Listed:
  • Corrigan, Jay R.
  • Rousu, Matthew C.

Abstract

Recent evidence suggests that participants' misunderstanding of experimental auction mechanism can systematically bias auction results. We present a simple technique for testing whether field auction mechanism and, by extension, whether auction bids provide an unbiased estimate of participants' willingness to pay.

Suggested Citation

  • Corrigan, Jay R. & Rousu, Matthew C., 2008. "Testing Whether Field Auction Experiments Are Demand Revealing in Practice," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(2).
    • Handle: RePEc:ags:jlaare:42464
    DOI: 10.22004/ag.econ.42464
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    References listed on IDEAS

    as
    1. List, John A & Shogren, Jason F, 1998. "The Deadweight Loss of Christmas: Comment," American Economic Review, American Economic Association, vol. 88(5), pages 1350-1355, December.
    2. Todd Cherry & Peter Frykblom & Jason Shogren & John List & Melonie Sullivan, 2004. "Laboratory Testbeds and Non-Market Valuation: The Case of Bidding Behavior in a Second-Price Auction with an Outside Option," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 29(3), pages 285-294, November.
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    4. Shogren, Jason F. & Cho, Sungwon & Koo, Cannon & List, John & Park, Changwon & Polo, Pablo & Wilhelmi, Robert, 2001. "Auction mechanisms and the measurement of WTP and WTA," Resource and Energy Economics, Elsevier, vol. 23(2), pages 97-109, April.
    5. John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
    6. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
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    8. Lusk,Jayson L. & Shogren,Jason F., 2007. "Experimental Auctions," Cambridge Books, Cambridge University Press, number 9780521671248, September.
    9. List, John A. & Margolis, Michael & Shogren, Jason F., 1998. "Hypothetical-actual bid calibration of a multigood auction," Economics Letters, Elsevier, vol. 60(3), pages 263-268, September.
    10. John A. List, 2002. "Preference Reversals of a Different Kind: The "More Is Less" Phenomenon," American Economic Review, American Economic Association, vol. 92(5), pages 1636-1643, December.
    11. John A. Fox & Jason F. Shogren & Dermot J. Hayes & James B. Kliebenstein, 1998. "CVM-X: Calibrating Contingent Values with Experimental Auction Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 455-465.
    12. Ty Feldkamp & Ted C. Schroeder, 2004. "Experimental Auction Procedure: Impact on Valuation of Quality Differentiated Goods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 389-405.
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    14. Rousu, Matthew C. & Corrigan, Jay R., 2008. "Consumer Preferences for Fair Trade Foods: Implications for Trade Policy," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 23(2), pages 1-3.
    15. List John A. & Sinha Paramita & Taylor Michael H., 2006. "Using Choice Experiments to Value Non-Market Goods and Services: Evidence from Field Experiments," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(2), pages 1-39, January.
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    17. Jay Corrigan, 2005. "Is the Experimental Auction a Dynamic Market?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(1), pages 35-45, May.
    18. David Lucking-Reiley & John A. List, 2000. "Demand Reduction in Multiunit Auctions: Evidence from a Sportscard Field Experiment," American Economic Review, American Economic Association, vol. 90(4), pages 961-972, September.
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    21. Jayson L. Lusk & John A. Fox & Ted C. Schroeder & James Mintert & Mohammad Koohmaraie, 2001. "In-Store Valuation of Steak Tenderness," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 539-550.
    22. Lusk, Jayson L. & Hudson, Darren, 2004. "Effect of monitor-subject cheap talk on ultimatum game offers," Journal of Economic Behavior & Organization, Elsevier, vol. 54(3), pages 439-443, July.
    23. Glenn W. Harrison & Ronald M. Harstad & E. Elisabet Rutstr–m, 2004. "Experimental Methods and Elicitation of Values," Experimental Economics, Springer;Economic Science Association, vol. 7(2), pages 123-140, June.
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    25. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
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    27. Rousu Matthew C. & Corrigan Jay R., 2008. "Estimating the Welfare Loss to Consumers When Food Labels Do Not Adequately Inform: An Application to Fair Trade Certification," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 6(1), pages 1-26, May.
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    More about this item

    Keywords

    Demand and Price Analysis;

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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