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Does a promise script work to reduce the hypothetical bias? Evidence from an induced value experiment

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  • Qin, Botao

Abstract

This paper explores whether a truth-telling promise can work to reduce the hypothetical bias in preference elicitation. Using an induced value experiment in China with a random nth-price auction, the author finds: 1) Hypothetical bias exists in a random nth-price auction with induced values and making a truth-telling promise can reduce the hypothetical bias. 2) All treatments are demand-revealing except for the hypothetical baseline.

Suggested Citation

  • Qin, Botao, 2020. "Does a promise script work to reduce the hypothetical bias? Evidence from an induced value experiment," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 14, pages 1-15.
    • Handle: RePEc:zbw:ifweej:202011
    DOI: 10.5018/economics-ejournal.ja.2020-11
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    More about this item

    Keywords

    Hypothetical bias; oath; random nth-price auction; induced value experiment;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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