TY - JOUR
T1 - Experimental economics and the environment
T2 - Eliciting values for controversial goods
AU - Shogren, Jason F.
AU - Parkhurst, Gregory M.
AU - Hudson, Darren
PY - 2010/4
Y1 - 2010/4
N2 - We illustrate the experimental method by examining bidding behavior for controversial goods, i.e., goods in which bidders have positive and negative values. Our results suggest that bidding behavior differs across auction type. Bidders with positive induced values bid sincerely in a WTP auction. Bidders bid conservatively, however, in the WTA auction, foregoing profitable opportunities. Informing bidders of their optimal strategy serves to attenuate bidding discrepancies but does not eliminate them. Treating the WTP and WTA auctions as equivalent given positive and negative values could lead one to overstate the costs relative to the benefits of the controversial good.
AB - We illustrate the experimental method by examining bidding behavior for controversial goods, i.e., goods in which bidders have positive and negative values. Our results suggest that bidding behavior differs across auction type. Bidders with positive induced values bid sincerely in a WTP auction. Bidders bid conservatively, however, in the WTA auction, foregoing profitable opportunities. Informing bidders of their optimal strategy serves to attenuate bidding discrepancies but does not eliminate them. Treating the WTP and WTA auctions as equivalent given positive and negative values could lead one to overstate the costs relative to the benefits of the controversial good.
KW - Experiments
KW - Positive and negative induced values
KW - Willingness to accept
KW - Willingness to pay
UR - http://www.scopus.com/inward/record.url?scp=84874641458&partnerID=8YFLogxK
U2 - 10.1017/S1068280500007206
DO - 10.1017/S1068280500007206
M3 - Article
AN - SCOPUS:84874641458
SN - 1068-2805
VL - 39
SP - 133
EP - 150
JO - Agricultural and Resource Economics Review
JF - Agricultural and Resource Economics Review
IS - 2
ER -