A Belief-Preference Model of Choice for Experience and Credence Goods |
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| Authors: | Marco Costanigro Yuko Onozaka |
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| Institution: | Marco Costanigro is in the department of Agricultural & Resource Economics,Colorado State University, USA. Email: marco.costanigro@colostate.edu for correspondence. Yuko Onozaka is in the UiS Business School, University of Stavanger, Norway. This research was funded by Norwegian Seafood Research Fund (FHF) project number 7351031. The authors thank Stephan Kroll and anonymous referees for their helpful comments on an earlier darft of this paper. |
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| Abstract: | We develop a methodology addressing the issue of confounded beliefs and preferences in models of discrete choice. First, we formalise the theoretical framework and logical underpinnings of a belief-preference model of choice for experience and credence goods, where subjective beliefs relate to uncertain product quality. We then present the experimental procedure within the context of an online choice experiment studying consumer food preferences. The empirical strategy leverages information from a quality sorting task to identify and estimate beliefs, while choice data are used to recover preferences. By conditioning product choices on predicted quality perceptions, the issue of endogenous beliefs is resolved. |
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| Keywords: | Consumer demand discrete choice experimental economics food nutrition and health information marketing |
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