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Value-elicitation and value-formation properties of discrete choice experiment and experimental auctions

Author

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  • Simone Cerroni
  • Verity Watson
  • Dimitrios Kalentakis
  • Jennie I Macdiarmid

Abstract

This paper tests if second-price Vickrey auction (SPVA) and discrete choice experiment (DCE) are isomorphic, and whether lack of isomorphism is due to value elicitation, value-formation or both. We conduct an artefactual field experiment that combines induced-value (IV) and home-grown (HG) procedures using SPVA and DCE. Induced-value preferences are elicited for tokens and HG preferences for multi-attribute lasagnes. Attributes are healthiness and environmental sustainability. Our results suggest that HG preferences differ across elicitation methods. This discrepancy is due to value-elicitation and value-formation. DCE is the most demand revealing approach and provides the highest premiums for healthy and environmentally sustainable lasagnes.

Suggested Citation

  • Simone Cerroni & Verity Watson & Dimitrios Kalentakis & Jennie I Macdiarmid, 2019. "Value-elicitation and value-formation properties of discrete choice experiment and experimental auctions," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 46(1), pages 3-27.
    • Handle: RePEc:oup:erevae:v:46:y:2019:i:1:p:3-27.
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    File URL: http://hdl.handle.net/10.1093/erae/jby014
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    Cited by:

    1. Chavez, Daniel E. & Palma, Marco A. & Nayga, Rodolfo M. & Mjelde, James W., 2020. "Product availability in discrete choice experiments with private goods," Journal of choice modelling, Elsevier, vol. 36(C).
    2. Tajana Čop & Mario Njavro, 2022. "Application of Discrete Choice Experiment in Agricultural Risk Management: A Review," Sustainability, MDPI, vol. 14(17), pages 1-17, August.
    3. Zhai, Qianqian & Kassas, Bachir & Zhao, Shuoli & Chen, Lijun & Chen, Chao, 2020. "Investigating Preference Inconsistencies in Incentive Structures that Account for House Money Effects," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304584, Agricultural and Applied Economics Association.
    4. Chloe S McCallum & Simone Cerroni & Daniel Derbyshire & W George Hutchinson & Rodolfo M Nayga, 2022. "Consumers’ responses to food fraud risks: an economic experiment," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(4), pages 942-969.

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