Hostname: page-component-7b9c58cd5d-7g5wt Total loading time: 0 Render date: 2025-03-16T13:01:46.072Z Has data issue: false hasContentIssue false
  • English
  • Français

Experimental Methods and Elicitation of Values

Published online by Cambridge University Press:  14 March 2025

Glenn W. Harrison ,
Ronald M. Harstad  and
E. Elisabet Rutström
Glenn W. Harrison*
Affiliation:
Department of Economics, College of Business Administration, University of Central Florida, Orlando, Florida, USA
Ronald M. Harstad*
Affiliation:
Department of Economics, University of Missouri-Columbia, Columbia, Missouri, USA
E. Elisabet Rutström*
Affiliation:
Department of Economics, College of Business Administration, University of Central Florida, Orlando, Florida, USA
*
email: [email protected]
email: [email protected]
email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Experimental methods are currently being extensively used to elicit subjective values for commodities and projects. Three methodological problems are not systematically addressed in this emerging literature. The first is the potential for laboratory responses to be censored by field opportunities, so that lab responses can be confounded by uncontrolled knowledge of the field; the second is the potential for subjective perceptions about field opportunities, and hence valuation responses, to be affected by the institution used to elicit values; and the third is the potential for some elicitation institutions to influence subjective perceptions of characteristics of the commodity or project being valued, and hence change the very commodity being valued. All three problems result in potential loss of control over the value elicitation process. For example, we show that censoring affects conclusions drawn in a major study of beef packaging valuation. We derive implications for experimental designs that minimize the potential effect of these methodological problems.

Keywords

experimentsvaluationauctionsincentive-compatibility

JEL classification

B4: Economic Methodology D8: Information, Knowledge, and Uncertainty C9: Design of Experiments
Type
Research Article
Information
Experimental Economics , Volume 7 , Issue 2 , June 2004 , pp. 123 - 140
Copyright
Copyright © 2004 Economic Science Association

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

Author to whom correspondence should be addressed.

†

Rutström thanks the U.S. National Science Foundation for research support under grants NSF/IIS 9817518, NSF/MRI 9871019 and NSF/POWRE 9973669. We are grateful for comments from two referees.

References

Ausubel, L.M. (2002). “An Efficient Ascending-Bid Auction for Multiple Objects.” Working Paper No. 97-06, University of Maryland, American Economic Review (forthcoming).Google Scholar
Blackburn, M., Harrison, G.W., and Rutström, E.E. (1994). “Statistical Bias Functions and Informative Hypothetical Surveys.” American Journal of Agricultural Economics. 76, 1084–1088.CrossRefGoogle Scholar
Cherry, T.L., Frykblom, P., List, J.A., Shogren, J.F., and Williams, M.B. (2001). “Laboratory Testbeds and Nonmarket Valuation: The Case of Bidding Behavior in a Second-Price Auction with an Outside Option.” Unpublished Manuscript, Department of Economics, Appalachian State University.Google Scholar
Coller, M. and Williams, M.B. (1999). “Eliciting Individual Discount Rates.” Experimental Economics. 2, 107127.CrossRefGoogle Scholar
Cummings, R.G. and Harrison, G.W. (1994). “Was the Ohio Court Well Informed in Their Assessment of the Accuracy of the Contingent Valuation Method?” Natural Resources Journal. 34(1), 1–36.Google Scholar
Cummings, R.G., Harrison, G.W., and Rutström, E.E. (1995). “Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive Compatible?” American Economic Review. 85(1), 260266.Google Scholar
Davis, D.D. and Holt, C.A. (1993). Experimental Economics. Princeton, NJ: Princeton University Press.CrossRefGoogle Scholar
Friedman, D. and Sunder, S. (1994). Experimental Methods: A Primer for Economists. New York: Cambridge University Press.CrossRefGoogle Scholar
Harrison, G.W., Lau, M.I., and Williams, M.B. (2002). “Estimating Individual Discount Rates for Denmark: A Field Experiment.” American Economic Review. 92(5), 1606–1617.CrossRefGoogle Scholar
Harstad, R.M. (2000) “Dominant Strategy Adoption and Bidders’ Experience with Pricing Rules.” Experimental Economics. 3(3), 261–280.CrossRefGoogle Scholar
Hayes, D.J., Shogren, J., Shin, S.Y., and Kliebenstein, J.B. (1995) “Valuing Food Safety in Experimental Auction Markets.” American Journal of Agricultural Economics. 77, 40–53.CrossRefGoogle Scholar
Hey, J.D. (1991). Experiments in Economics. Cambridge, UK: Blackwell.Google Scholar
Hoffman, E., Menkhaus, D.J., Chakravarti, D., Field, R.A., and Whipple, G.D. (1993). “Using Laboratory Experimental Auctions in Marketing Research: A Case Study of New Packaging for Fresh Beef.” Marketing Science. 12(3), 318–338.CrossRefGoogle Scholar
Holt, C.A. and Laury, S.K. (2002). “Risk Aversion and Incentive Effects.” American Economic Review. 92(5), 1644–1655.CrossRefGoogle Scholar
Kagel, J.H., Harstad, R.M., and Levin, D. (1987). “Information Impact and Allocation Rules in Auctions with Affiliated Private Values: A Laboratory Study.” Econometrica. 55, 1275–1304.CrossRefGoogle Scholar
Kagel, J.H. and Roth, A.E. (eds.). (1995) The Handbook of Experimental Economics. Princeton: Princeton University Press.CrossRefGoogle Scholar
Kirchkamp, O. and Moldovanu, B. (2001). “An Experimental Analysis of Auctions with Interdependent Valuations.” Working Paper. Department of Economics, Mannheim University, Games and Economic Behavior (forthcoming).Google Scholar
Menkhaus, D.J., Borden, G.W., Whipple, G.D., Hoffman, E., and Field, R.A. (1992). “An Empirical Application of Laboratory Experimental Auctions in Marketing Research.” Journal of Agricultural and Resource Economics. 17(1), 44–55.Google Scholar
Neill, H.R., Cummings, R.G., Ganderton, P.T., Harrison, G.W., and McGuckin, T. (1994). “Hypothetical Surveys and Real Economic Commitments.” Land Economics. 70(2), 145–154.CrossRefGoogle Scholar
Rutström, E.E. (1998). “Home-Grown Values and the Design of Incentive Compatible Auctions.” International Journal of Game Theory. 27(3), 427–441.Google Scholar
Schmitz, J.D., Menkhaus, D.J., Whipple, G.D., Hoffman, E., and Field, R.A. (1993). “Impact of Changing Consumer Preferences On Willingness-to-Pay for Beef Steaks In Alternative Retail Packaging.” Journal of Food Distribution Research. 24, 23–35.Google Scholar
Smith, V.L. (1982). “Microeconomic Systems as an Experimental Science.” American Economic Review. 72(5), 923–955.Google Scholar