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An Experimental Approach To Valuing New Differentiated Products

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  • Maynard, Leigh J.
  • Hartell, Jason G.
  • Meyer, A. Lee
  • Hao, Jianqiang

Abstract

An experimental store was created to evaluate initial demand for locally-produced and guaranteed tender steak products as a more realistic alternative to contingent valuation (CV) and dichotomous-choice experimental methods. Strengths of the approach are incentive compatibility, a realistic consumption set, and a familiar choice environment. Consumers selected among USDA Choice, premium quality, lean, guaranteed tender, and locally-produced strip steaks. A double-hurdle count data model indicated initial willingness-to-pay for locally-produced steak comparable to prior CV results, but demand was highly elastic. Demand for premium quality steak crowded out demand for the guaranteed tender product, contrasting with prior dichotomous-choice experimental results.

Suggested Citation

  • Maynard, Leigh J. & Hartell, Jason G. & Meyer, A. Lee & Hao, Jianqiang, 2003. "An Experimental Approach To Valuing New Differentiated Products," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25810, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae03:25810
    DOI: 10.22004/ag.econ.25810
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    3. Li, Hao & Elbakidze, Levan, 2016. "Application of Regression Discontinuity Approach in Experimental Auctions: A Case Study of Gaining Participants’ Trust and Their Willingness to Pay," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236149, Agricultural and Applied Economics Association.
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    8. Neill, Clinton L. & Lahne, Jacob, 2022. "Matching reality: A basket and expenditure based choice experiment with sensory preferences," Journal of choice modelling, Elsevier, vol. 44(C).
    9. Silva, Andres & Nayga, Rodolfo M., Jr. & Campbell, Benjamin L. & Park, John L., 2011. "Revisiting Cheap Talk with New Evidence from a Field Experiment," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(2), pages 1-12, August.
    10. Francisco Rosas & Santiago Acerenza & Peter F. Orazem, 2020. "Optimal pricing strategies for a cluster of goods: own- and cross-price effects with correlated tastes," Applied Economics, Taylor & Francis Journals, vol. 52(7), pages 742-755, February.
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    12. Daniel E. Chavez & Marco A. Palma, 2019. "Pushing subjects beyond rationality with more alternatives in experimental auctions," Agricultural Economics, International Association of Agricultural Economists, vol. 50(2), pages 207-217, March.
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    14. Yan, Jiong & Barkmann, Jan & Marggraf, Rainer, 2007. "Chinese tourist preferences for nature based destinations: a choice experiment analysis," DARE Discussion Papers 0706, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    15. Elliott J. Dennis & Glynn T. Tonsor & Jayson L. Lusk, 2021. "Choosing quantities impacts individuals choice, rationality, and willingness to pay estimates," Agricultural Economics, International Association of Agricultural Economists, vol. 52(6), pages 945-962, November.
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    17. Elizabeth S. Byrd & Nicole J. Olynk Widmar & Benjamin M. Gramig, 2018. "Presentation matters: Number of attributes presented impacts estimated preferences," Agribusiness, John Wiley & Sons, Ltd., vol. 34(2), pages 377-389, March.
    18. Leigh J. Maynard & Ellen Goddard & John Conley, 2008. "Impact of BSE on Beef Purchases in Alberta and Ontario Quick‐Serve Restaurants," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(3), pages 337-351, September.
    19. Trenkel, Hermann E., 2005. "Möglichkeiten experimenteller Methoden in der Agrarökonomie," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 40, March.

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