Are ‘true’ preferences revealed in repeated markets? An experimental demonstration of context-dependent valuations

Tufano, Fabio

doi:10.1007/s10683-009-9226-8

Cited by 35 publications

(52 citation statements)

References 21 publications

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“…Finally, Tufano (2010) explored the robustness of anchoring for hedonic experiences, rather than goods, by using a binary-choice elicitation procedure. In particular, he examined whether WTA to drink a bad-tasting liquid (similar to the one used by ALP, in a treatment not reported here) was sensitive to an anchor.…”

Section: More Recent Evidencementioning

confidence: 99%

One Swallow Doesn't Make a Summer: New Evidence on Anchoring Effects

Maniadis

Tufano

List

2014

American Economic Review

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268

182

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Section: More Recent Evidencementioning

confidence: 99%

One Swallow Doesn't Make a Summer: New Evidence on Anchoring Effects

Maniadis

Tufano

List

2014

American Economic Review

Self Cite

268

182

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“…Tufano (2010) used the anchoring manipulation to increase the variance in subjects' WTA for a bad-tasting liquid, but the manipulation had no effect. Notice that this liquid offers a simple (negative) hedonic experience, like the "annoying sounds" used in Experiment 2 of ALP.…”

mentioning

confidence: 99%

On the Robustness of Anchoring Effects in WTP and WTA Experiments

Fudenberg

Levine

Maniadis

2012

American Economic Journal: Microeconomics

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Decades of evidence from individual-choice experiments have documented that subjects do not always satisfy the assumptions of consumer theory and of expected utility theory. Some departures from the standard model can be accommodated while maintaining the assumption that people do have stable preferences. Experiments on anchoring effects are more troubling as they suggest that many people do not have fixed or slowly changing preferences. A defender of the standard models might argue that this is not relevant to most everyday consumer decisions, and that an average person with enough experience will have relatively fixed preferences for common market goods. This suggests that experience with the goods and decisions in question may be important in the stability of preferences. Since people are relatively familiar with risky monetary choices, this in turn suggests that decisions about uncertain prospects (lotteries) might be relatively stable.If the monetary valuation of goods and gambles is based on constant underlying preferences, choices should be independent of irrelevant prior "anchoring" questions. In the case of lotteries, Johnson and Schkade (1989) showed that asking subjects whether they would prefer a fixed amount (the anchor) to a given gamble affected subsequently stated certainty equivalents. Chapman and Johnson (1999) had subjects generate a random anchor from their Social Security Number (SSN

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“…WTA bids submitted by subjects asked to consider the $0.50 offer were on average 50% higher than those submitted by subjects asked to consider the $0.10 offer. Building on this experiment, Tufano (2010) also showed that market participants adjusted their bids towards the price observed in previous market periods when, by design, individuals' values should not be affiliated with the market price.…”

Section: The Anchoring Effectmentioning

confidence: 84%

Repeated Rounds with Price Feedback in Experimental Auction Valuation: An Adversarial Collaboration

Corrigan

Drichoutis

Lusk

et al. 2011

American J Agri Economics

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It is generally thought that market outcomes are improved with the provision of market information. As a result, the use of repeated rounds with price feedback has become standard practice in the applied experimental auction valuation literature. We conducted two experiments to determine how rationally subjects behave with and without price feedback in a second price auction. Results from an auction for lotteries show that subjects exposed to price feedback are significantly more likely to commit preference reversals. However, this irrationality diminishes in later rounds. Results from an induced value auction indicate that price feedback caused greater deviations from the Nash equilibrium bidding strategy. Our results suggest that while bidding on the same item repeatedly improves auction outcomes, this improvement is not the result of price feedback. JEL codes: D44

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Are ‘true’ preferences revealed in repeated markets? An experimental demonstration of context-dependent valuations

Abstract: Auctions, Valuations, Economic principles, Anomalies, Experiments, Social interactions, C92, D01, D44,

Cited by 35 publications

References 21 publications

One Swallow Doesn't Make a Summer: New Evidence on Anchoring Effects

One Swallow Doesn't Make a Summer: New Evidence on Anchoring Effects

On the Robustness of Anchoring Effects in WTP and WTA Experiments

Repeated Rounds with Price Feedback in Experimental Auction Valuation: An Adversarial Collaboration

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