IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2309.00114.html
   My bibliography  Save this paper

Accurate Quality Elicitation in a Multi-Attribute Choice Setting

Author

Listed:
  • Changkuk Im

Abstract

This paper studies how to accurately elicit quality for alternatives with multiple attributes. Two multiple price lists (MPLs) are considered: (i) m-MPL which asks subjects to compare an alternative to money, and (ii) p-MPL where subjects are endowed with money and asked whether they would like to buy an alternative or not. Theoretical results show that m-MPL requires fewer assumptions for accurate quality elicitation compared to p-MPL. Experimental evidence from a within-subject experiment using consumer products shows that switch points between the two MPLs are different, which suggests that quality measures are sensitive to the elicitation method.

Suggested Citation

  • Changkuk Im, 2023. "Accurate Quality Elicitation in a Multi-Attribute Choice Setting," Papers 2309.00114, arXiv.org, revised Dec 2023.
    • Handle: RePEc:arx:papers:2309.00114
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2309.00114
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Simonson, Itamar, 1989. "Choice Based on Reasons: The Case of Attraction and Compromise Effects," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 16(2), pages 158-174, September.
    2. Ben Greiner, 2015. "Subject pool recruitment procedures: organizing experiments with ORSEE," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 1(1), pages 114-125, July.
    3. Yaron Azrieli & Christopher P. Chambers & Paul J. Healy, 2020. "Incentives in experiments with objective lotteries," Experimental Economics, Springer;Economic Science Association, vol. 23(1), pages 1-29, March.
    4. Pedro Bordalo & Nicola Gennaioli & Andrei Shleifer, 2013. "Salience and Consumer Choice," Journal of Political Economy, University of Chicago Press, vol. 121(5), pages 803-843.
    5. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    6. Jason Somerville, 2022. "Range‐Dependent Attribute Weighting in Consumer Choice: An Experimental Test," Econometrica, Econometric Society, vol. 90(2), pages 799-830, March.
    7. Charles Sprenger, 2015. "An Endowment Effect for Risk: Experimental Tests of Stochastic Reference Points," Journal of Political Economy, University of Chicago Press, vol. 123(6), pages 1456-1499.
    8. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1325-1348, December.
    9. Jack, B. Kelsey & McDermott, Kathryn & Sautmann, Anja, 2022. "Multiple price lists for willingness to pay elicitation," Journal of Development Economics, Elsevier, vol. 159(C).
    10. Bruce G. S. Hardie & Eric J. Johnson & Peter S. Fader, 1993. "Modeling Loss Aversion and Reference Dependence Effects on Brand Choice," Marketing Science, INFORMS, vol. 12(4), pages 378-394.
    11. Benjamin Bushong & Matthew Rabin & Joshua Schwartzstein, 2021. "A Model of Relative Thinking," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(1), pages 162-191.
    12. Yaron Azrieli & Christopher P. Chambers & Paul J. Healy, 2018. "Incentives in Experiments: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 126(4), pages 1472-1503.
    13. Charles A. Holt & Angela M. Smith, 2016. "Belief Elicitation with a Synchronized Lottery Choice Menu That Is Invariant to Risk Attitudes," American Economic Journal: Microeconomics, American Economic Association, vol. 8(1), pages 110-139, February.
    14. Botond Koszegi & Adam Szeidl, 2013. "A Model of Focusing in Economic Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(1), pages 53-104.
    15. Fehr, Dietmar & Kübler, Dorothea, 2022. "The Endowment Effect in the General Population," Rationality and Competition Discussion Paper Series 353, CRC TRR 190 Rationality and Competition.
    16. Steffen Andersen & Glenn W. Harrison & Morten I. Lau & E. Elisabet Rutström, 2008. "Eliciting Risk and Time Preferences," Econometrica, Econometric Society, vol. 76(3), pages 583-618, May.
    17. Paolo Crosetto & Antonio Filippin, 2016. "A theoretical and experimental appraisal of four risk elicitation methods," Experimental Economics, Springer;Economic Science Association, vol. 19(3), pages 613-641, September.
    18. repec:cup:judgdm:v:16:y:2021:i:6:p:1464-1484 is not listed on IDEAS
    19. Monic Sun, 2012. "How Does the Variance of Product Ratings Matter?," Management Science, INFORMS, vol. 58(4), pages 696-707, April.
    20. Landry, Peter & Webb, Ryan, 2021. "Pairwise normalization: A neuroeconomic theory of multi-attribute choice," Journal of Economic Theory, Elsevier, vol. 193(C).
    21. S. Sriram & Pradeep K. Chintagunta & Puneet Manchanda, 2015. "Service Quality Variability and Termination Behavior," Management Science, INFORMS, vol. 61(11), pages 2739-2759, November.
    22. Sungjoon Nam & Puneet Manchanda & Pradeep K. Chintagunta, 2010. "The Effect of Signal Quality and Contiguous Word of Mouth on Customer Acquisition for a Video-on-Demand Service," Marketing Science, INFORMS, vol. 29(4), pages 690-700, 07-08.
    23. Montgomery, Cynthia A & Wernerfelt, Birger, 1992. "Risk Reduction and Umbrella Branding," The Journal of Business, University of Chicago Press, vol. 65(1), pages 31-50, January.
    24. Jonathan P. Beauchamp & Daniel J. Benjamin & David I. Laibson & Christopher F. Chabris, 2020. "Measuring and controlling for the compromise effect when estimating risk preference parameters," Experimental Economics, Springer;Economic Science Association, vol. 23(4), pages 1069-1099, December.
    25. Jonathan Chapman & Mark Dean & Pietro Ortoleva & Erik Snowberg & Colin Camerer, 2023. "Willingness to Accept, Willingness to Pay, and Loss Aversion," CESifo Working Paper Series 10200, CESifo.
    26. Sippel, Reinhard, 1997. "An Experiment on the Pure Theory of Consumer's Behaviour," Economic Journal, Royal Economic Society, vol. 107(444), pages 1431-1444, September.
    27. Huber, Joel & Payne, John W & Puto, Christopher, 1982. "Adding Asymmetrically Dominated Alternatives: Violations of Regularity and the Similarity Hypothesis," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 9(1), pages 90-98, June.
    28. Jonathan Chapman & Mark Dean & Pietro Ortoleva & Erik Snowberg & Colin Camerer, 2023. "Willingness to Accept, Willingness to Pay, and Loss Aversion," NBER Working Papers 30836, National Bureau of Economic Research, Inc.
    29. Chi Wai Yu & Y. Jane Zhang & Sharon Xuejing Zuo, 2021. "Multiple Switching and Data Quality in the Multiple Price List," The Review of Economics and Statistics, MIT Press, vol. 103(1), pages 136-150, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jack, B. Kelsey & McDermott, Kathryn & Sautmann, Anja, 2022. "Multiple price lists for willingness to pay elicitation," Journal of Development Economics, Elsevier, vol. 159(C).
    2. Fabio Galeotti & Maria Montero & Anders Poulsen, 2022. "The Attraction and Compromise Effects in Bargaining: Experimental Evidence," Management Science, INFORMS, vol. 68(4), pages 2987-3007, April.
    3. Castillo, Geoffrey, 2020. "The attraction effect and its explanations," Games and Economic Behavior, Elsevier, vol. 119(C), pages 123-147.
    4. Roman Inderst & Martin Obradovits, 2023. "Excessive Competition On Headline Prices," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(2), pages 783-808, May.
    5. Markus Dertwinkel-Kalt & Mats Köster, 2020. "Salience and Skewness Preferences [Risk-neutral Firms can Extract Unbounded Profits from Consumers with Prospect Theory Preferences]," Journal of the European Economic Association, European Economic Association, vol. 18(5), pages 2057-2107.
    6. Carroni, Elias & Mantovani, Andrea & Minniti, Antonio, 2023. "Price signaling with salient-thinking consumers," Games and Economic Behavior, Elsevier, vol. 138(C), pages 238-253.
    7. Zhuo Chen & Russell Golman & Jason Somerville, 2024. "Menu-dependent risk attitudes: Theory and evidence," Journal of Risk and Uncertainty, Springer, vol. 68(1), pages 77-105, February.
    8. Rosato, Antonio & Tymula, Agnieszka A., 2024. "A novel experimental test of truthful bidding in second-price auctions with real objects," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 111(C).
    9. Alex Imas & Sally Sadoff & Anya Samek, 2017. "Do People Anticipate Loss Aversion?," Management Science, INFORMS, vol. 63(5), pages 1271-1284, May.
    10. Jonathan Chapman & Erik Snowberg & Stephanie Wang & Colin Camerer, 2018. "Loss Attitudes in the U.S. Population: Evidence from Dynamically Optimized Sequential Experimentation (DOSE)," NBER Working Papers 25072, National Bureau of Economic Research, Inc.
    11. Pedro Bordalo & Nicola Gennaioli & Andrei Shleifer, 2013. "Salience and Consumer Choice," Journal of Political Economy, University of Chicago Press, vol. 121(5), pages 803-843.
    12. Ronayne, David & Brown, Gordon D.A., 2016. "Multi-attribute decision by sampling: An account of the attraction, comprimise and similarity effects," The Warwick Economics Research Paper Series (TWERPS) 1124, University of Warwick, Department of Economics.
    13. Inderst, Roman & Obradovits, Martin, 2019. "Competitive Strategies when Consumers are Relative Thinkers: Implications for Pricing, Promotions, and Product Choice," EconStor Preprints 253658, ZBW - Leibniz Information Centre for Economics.
    14. Tamás Csermely & Alexander Rabas, 2016. "How to reveal people’s preferences: Comparing time consistency and predictive power of multiple price list risk elicitation methods," Journal of Risk and Uncertainty, Springer, vol. 53(2), pages 107-136, December.
    15. Barna Bakó & Gábor Neszveda & Linda Dezső, 2018. "When irrelevant alternatives do matter. The effect of focusing on loan decisions," Theory and Decision, Springer, vol. 84(1), pages 123-141, January.
    16. Charness, Gary & Gneezy, Uri & Imas, Alex, 2013. "Experimental methods: Eliciting risk preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 87(C), pages 43-51.
    17. Achilleas Vassilopoulos & Andreas C. Drichoutis & Rodolfo M. Nayga, 2024. "Reference dependence, expectations and anchoring in the Becker-DeGroot-Marschak mechanism," Theory and Decision, Springer, vol. 97(4), pages 637-683, December.
    18. Yi Li, 2021. "The ABC mechanism: an incentive compatible payoff mechanism for elicitation of outcome and probability transformations," Experimental Economics, Springer;Economic Science Association, vol. 24(3), pages 1019-1046, September.
    19. Fabrice Le Lec & Marianne Lumeau & Benoît Tarroux, 2022. "How choice proliferation affects revealed preferences," Theory and Decision, Springer, vol. 93(2), pages 331-358, September.
    20. Jason Somerville, 2022. "Range‐Dependent Attribute Weighting in Consumer Choice: An Experimental Test," Econometrica, Econometric Society, vol. 90(2), pages 799-830, March.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2309.00114. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.