Effects of Cheap Talk on Consumer Willingness‐To‐Pay for Golden Rice

A large body of literature suggests willingness-to-pay is overstated in hypothetical valuation questions as compared to when actual payment is required. Recently, "cheap talk" has been proposed to eliminate the potential bias in hypothetical valuation questions. Cheap talk refers to process of explaining hypothetical bias to individuals prior to asking a valuation question. This study explores the effect of cheap talk in a mass mail survey using a conventional value elicitation technique. Results indicate that cheap talk was effective at reducing willingness-to-pay for most survey participants; however, consistent with previous research, cheap talk did not reduce willingness-to-pay for knowledgeable consumers.

[1]  Stéphane Robin,et al.  Do consumers not care about biotech foods or do they just not read the labels , 2002 .

[2]  J. Whitehead,et al.  Are Hypothetical Referenda Incentive Compatible? A comment , 1999, Journal of Political Economy.

[3]  J. Shogren,et al.  Observed choices for food safety in retail, survey, and auction markets , 1999 .

[4]  Edward P. Lazear,et al.  A Jobs-Based Analysis of Labor Markets , 1995 .

[5]  T. Brown,et al.  Evaluating the Validity of the Dichotomous Choice Question Format in Contingent Valuation , 1997 .

[6]  R. G. Cummings,et al.  Unbiased Value Estimates for Environmental Goods: A Cheap Talk Design for the Contingent Valuation Method , 1999 .

[7]  John A. List,et al.  Hypothetical-actual bid calibration of a multigood auction , 1998 .

[8]  Lisa House,et al.  Influence of Brand Name, Store Loyalty, and Type of Modification on Consumer Acceptance of Genetically Engineered Corn Chips , 2001 .

[9]  Jutta Roosen,et al.  Demand for Beef from Cattle Administered Growth Hormones or Fed Genetically Modified Corn: A Comparison of Consumers in France, Germany, the United Kingdom, and the United States , 2003 .

[10]  Peter Martinsson,et al.  Do Hypothetical and Actual Marginal Willingness to Pay Differ in Choice Experiments?: Application to the Valuation of the Environment , 2001 .

[11]  Robin Gregory,et al.  Do Reminders of Substitutes and Budget Constraints Influence Contingent Valuation Estimates , 1994 .

[12]  Jayson L. Lusk,et al.  Modeling Consumer Acceptance of and Willingness to Pay for Genetically-Modified Foods in the United States and the European Union Authors: , 2001 .

[13]  John Quiggin,et al.  Estimation Using Contingent Valuation Data from a Dichotomous Choice with Follow-Up Questionnaire , 1994 .

[14]  Effect of monitor-subject cheap talk on ultimatum game offers , 2004 .

[15]  Trudy Ann Cameron,et al.  Efficient Estimation Methods for "Closed-ended' Contingent Valuation Surveys , 1987 .

[16]  R. G. Cummings,et al.  Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible? , 1995 .

[17]  John A. List,et al.  What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values? , 2001 .

[18]  Timothy C. Haab,et al.  Referendum Models and Economic Values: Theoretical, Intuitive, and Practical Bounds on Willingness to Pay , 1998 .

[19]  Glenn W. Harrison,et al.  Statistical Bias Functions and Informative Hypothetical Surveys , 1994 .

[20]  J. Shogren,et al.  Cvm‐X: Calibrating Contingent Values with Experimental Auction Markets , 1998 .

[21]  J. Hausman,et al.  Contingent Valuation: Is Some Number Better than No Number? , 1994 .

[22]  Jayson L. Lusk,et al.  ALTERNATIVE CALIBRATION AND AUCTION INSTITUTIONS FOR PREDICTING CONSUMER WILLINGESS TO PAY FOR NONGENETICALLY MODIFIED CORN CHIPS , 2001 .

[23]  Trudy Ann Cameron,et al.  A New Paradigm for Valuing Non-market Goods Using Referendum Data: Maximum Likelihood Estimation by Censored Logistic Regression' , 1988 .

[24]  K. McConnell,et al.  Valuing Environmental and Natural Resources , 2002 .

[25]  T. Cameron.  Interval Estimates of Non-Market Resource Values from Referendum Contingent Valuation Surveys , 1991 .

[26]  J. Lusk,et al.  INFLUENCE OF BRAND NAME AND TYPE OF MODIFICATION ON CONSUMER ACCEPTANCE OF GENETICALLY ENGINEERED CORN CHIPS: A PRELIMINARY ANALYSIS , 2001 .

[27]  W. Michael Hanemann,et al.  Statistical Efficiency of Double-Bounded Dichotomous Choice Contingent Valuation , 1991 .

[28]  Helen R. Neill,et al.  Hypothetical Surveys and Real Economic Commitments , 1994 .

[29]  John A. List,et al.  Do explicit warnings eliminate the hypothetical bias in elicitation procedures? Evidence from field auctions for sportscards , 2001 .

[30]  John A. List,et al.  Calibration of the difference between actual and hypothetical valuations in a field experiment , 1998 .

[31]  Antonella Trisorio,et al.  The effect of knowledge on the disparity between hypothetical and real willingness to pay , 2001 .

[32]  T. Haab.  Estimation Using Contingent Valuation Data from a “Dichotomous Choice with Follow-Up” Questionnaire: A Comment , 1998 .

[33]  John A. List,et al.  Preference Learning in Consecutive Experimental Auctions , 2000 .