An Empirical Study of Hypothetical Bias in Voluntary Contribution Contingent Valuation: Does Cheap Talk Matter?
نویسندگان
چکیده
Significant difference between response to real and hypothetical valuation questions is often referred to as hypothetical bias. The existence of hypothetical bias has been well documented in both experimental and field settings, but there is little consensus on how to systematically control for it. Cummings and Taylor have had success with using "cheap talk" (which entails reading a script that highlights the hypothetical bias problem before participants make any decisions) as a means of generating unbiased responses in a referendum format. In this paper, we test the robustness of cheap talk using a voluntary contribution mechanism. Our results (1) confirm the existence of hypothetical bias, but (2) suggest that the effectiveness of cheap talk appears to be quite limited.
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A large body of literature suggests individuals behave differently when responding to hypothetical valuation questions than when actual payment is required. Such findings have generated a great deal of skepticism over the use of the contingent valuation method and benefit measures derived from it. Recently, a new method, cheap talk, has been proposed to eliminate the potential bias in hypotheti...
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