Citation

Aadland DM, Caplan AJ, Phillips OR. J. Risk Uncertain. 2007; 35(2): 149-178.

Affiliation

Univ Wyoming, Dept Economics and Finance, Laramie, WY 82071 USA; Utah State Univ, Dept Economics, Logan, UT 84341 USA

Copyright

(Copyright © 2007, Holtzbrinck Springer Nature Publishing Group)

DOI

10.1007/s11166-007-9022-9

PMID

unavailable

Abstract

A theoretical framework is presented to explain how agents respond to information under uncertainty in contingent valuation surveys. Agents are provided with information signals and referendum prices as part of the elicitation process. Agents use Bayesian updating to revise prior distributions. An information prompt is presented to reduce hypothetical bias. However, we show the interaction between anchoring and the information prompt creates a systematic bias in willingness to pay. We test our hypotheses in an experimental setting where agents are asked to make a hypothetical, voluntary contribution to a public good. Experimental results are consistent with the model.

Language: en