Comparing Open‐Ended Choice Experiments and Experimental Auctions: An Application to Golden Rice

Abstract

We use two experimental valuation methods to estimate consumer demand for genetically modified golden rice. The first is an open-ended choice experiment (OECE) where participants name the quantities of golden rice and conventional rice demanded at each of several price combinations, one of which will be randomly chosen as binding. This allows us to estimate market demand by aggregating demand across participants. This estimate of market demand also allows us to estimate own-price elasticity and consumer surplus for golden rice. Comparing willingness-to-pay (WTP) estimates from the OECE with those from a uniform-price auction, we find that OECE WTP estimates exhibit less affiliation across rounds, and the effects of positive and negative information under the OECE are more consistent with prior expectations and existing studies. We also find that, while auction WTP estimates more than double across five rounds, OECE WTP estimates are stable across rounds and are always roughly equal to those from the final auction round.

Relative importance of price in forming individuals’ decisions toward sustainable food: A calibrated auction-conjoint experiment

“…Incentive-compatible elicitation mechanisms can be categorized into two general categories: experimental auctions and non-hypothetical discrete choice experiments (Corrigan et al, 2009;Lusk and Shogren, 2007;Lusk and Schroeder, 2004). One of the main advantages of experimental auctions is that they place subjects in an active market environment where they can learn and adjust to market conditions.…”

Market Potential of Folate Biofortified Rice in China

“…However, when providing conflicting information treatments, i.e. both positive and negative statements about GM food, there is less consensus about the information effect on WTP (Parkhurst et al, 2004;Rousu et al, 2004b;Hu et al, 2006;Colson and Huffman, 2009;Corrigan et al, 2009;Depositario et al, 2009a). A similar discussion is being held in valuation experiments with other controversial foods, such as irradiated meat (Fox et al, 2002;Parkhurst et al, 2004).…”

“…Another potential determinant related to the design characteristics is the impact of the presence of an auctioned substitute, which is currently lacking in GM food auctions (Kassardjian et al, 2005;Corrigan et al, 2009). Given that FBR is a GM rice crop with folate benefits, half of the participants could opt for a non-GM folate product, i.e.…”

“…address the need to incorporate substitutes in GM food auctions (Corrigan, 2005;Kassardjian et al, 2005;Corrigan et al, 2009 The impact of the value elicitation method on WTP values has been widely investigated (Johannesson et al, 1998;List and Gallet, 2001;Lusk et al, 2005;Huffman et al, 2007). Generally, hypothetical valuation methods are found to generate significantly higher values than the non-hypothetical methods, a phenomenon which is mainly attributed to the lack of hypothetical bias in the latter (Balistreri et al, 2001 (Balistreri et al, 2001;List and Gallet, 2001;Chern and Chang, 2009).…”

Determining South African consumers’ willingness to pay for certified Karoo lamb: An application of an experimental auction

“…As explained in the study by Corrigan, Depositario, Nayga, Wu, & Laude (2009), if participants only bid on the product, the bidding value can be taken as the premium a participant is willing to pay for the additional attribute. Where participants bid on the entire product and their market value for the base product is not known, it would be complicated to extract the WTP estimate for the additional product attribute.…”