Referenda Under Oath

Herein we explore whether a solemn oath can eliminate hypothetical bias in a voting referenda, a popular elicitation mechanism promoted in non-market valuation exercises for its incentive compatibility properties. First, we reject the null hypothesis that a hypothetical bias does not exist. Second, we observe that people who sign an oath are significantly less likely to vote for the public good in a hypothetical referenda. We complement this evidence with a self-reported measure of honesty which confirms that the oath increases truthfulness in answers. This result opens interesting avenues for improving the elicitation of preferences in the lab and beyond.     

Heterogeneous anchoring and the shift effect in iterative valuation questions

In this article, we consider starting point bias as a heterogeneous phenomenon, that is, respondents in contingent valuation surveys do not anchor in the same way. We study the consequences of a mistaken assumption of homogeneous anchoring for the analysis of the shift effect in multiple-bounded dichotomous choice format, when respondents really have heterogeneous anchoring. We show that the shift effect, generally interpreted as incentive incompatibility or “yea”-saying, can be the spurious outcome of disregarded heterogeneous anchoring.     

Modeling Starting Point Bias as Unobserved Heterogeneity in Contingent Valuation Surveys: An Application to Air Pollution

Up to now, the starting point bias has generally been considered to be a homogeneous phenomenon. In this article, we treat anchoring as an unobserved heterogeneous phenomenon. Our contribution is twofold. First, we show analytically and by way of simulations that assuming homogeneous anchoring can be hazardous and lead to misspecifications. Second, we propose an econometric model that starts with a dichotomous question and then uses an open-ended question. We finally apply our model to a contingent valuation survey on air quality. Our results suggest that how anchoring is modeled in empirical studies deserves more attention.     

Are choice experiments reliable? Evidence from the lab

This study investigates whether a popular stated preference method, the choice experiment (CE), reliably measures individuals’ values for a good. We address this question using an induced value experiment. Our results indicate that CEs fail to elicit payoff maximizing choices. We find little evidence that increasing the salience of the choices or adding monetary incentives increase the proportion of payoff maximizing choices. This questions the increasing use of CE to value non-market goods for policy making.     

A robust algorithm for parameter estimation in smooth transition autoregressive models

This paper considers whether earned wealth affects bidding behavior in an induced-value second-price auction. We find people bid more sincerely in the auction with earned wealth given monetary incentives; earned wealth did not induce sincere bidding in hypothetical auctions.     

Social Psychology and Environmental Economics: A New Look at <Emphasis Type="Italic">ex ante</Emphasis> Corrections of Biased Preference Evaluation

The field of social psychology explores how a person behaves within the context of other people. The social context can play a substantive role in non-market allocation decisions given peoples choices and values extend beyond the classic market-based exchange institution. Herein we explore how social psychology has affected one aspect of environmental economics: preference elicitation through survey work. We discuss social representation, social isolation, framing through cheap talk, and commitment theory through an oath.     

Coordination with communication under oath

We focus on the design of an institutional device aimed to foster coordination through communication. We explore whether the social psychology theory of commitment, implemented via a truth-telling oath, can reduce coordination failure. Using a classic coordination game, we ask all players to sign voluntarily a truth-telling oath before playing the game with cheap talk communication. Three results emerge with commitment under oath: (1) coordination increased by nearly 50%; (2) senders’ messages were significantly more truthful and actions more efficient, and (3) receivers’ trust of messages increased.