Examining projection bias in experimental auctions: the role of hunger and immediate gratification

Briz, Teresa; Drichoutis, Andreas C.; House, Lisa

doi:10.1186/s40100-015-0040-7

Cited by 18 publications

(14 citation statements)

References 36 publications

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“…Finally, the study carried out by [ 7 ] approached the issue of projection bias using a home-grown experimental auction when bidding on a ham and cheese sandwich. The authors reported the existence of projection bias when subjects had to predict their future tastes versus when they bid for a product intended for immediate consumption.…”

Section: Introductionmentioning

confidence: 99%

“…Although the studies of [ 5 ][ 6 ] and [ 7 ] bear important information to the literature,they present some limitations.…”

Section: Introductionmentioning

confidence: 99%

“…Firstly, in the studies of [ 5 ] and [ 7 ], the appetite of subjects was manipulated by varying the time of day when their choices were made. Therefore, hungry and satiated states of individuals were supposed to depend on the time of day (i.e.…”

Section: Introductionmentioning

confidence: 99%

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Assessing Projection Bias in Consumers’ Food Preferences

Magistris

Gracía

2016

PLoS ONE

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The aim of this study is to test whether projection bias exists in consumers’ purchasing decisions for food products. To achieve our aim, we used a non-hypothetical experiment (i.e., experimental auction), where hungry and non-hungry participants were incentivized to reveal their willingness to pay (WTP). The results confirm the existence of projection bias when consumers made their decisions on food products. In particular, projection bias existed because currently hungry participants were willing to pay a higher price premium for cheeses than satiated ones, both in hungry and satiated future states. Moreover, participants overvalued the food product more when they were delivered in the future hungry condition than in the satiated one. Our study provides clear, quantitative and meaningful evidence of projection bias because our findings are based on economic valuation of food preferences. Indeed, the strength of this study is that findings are expressed in terms of willingness to pay which is an interpretable amount of money.

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Section: Introductionmentioning

confidence: 99%

“…Although the studies of [ 5 ][ 6 ] and [ 7 ] bear important information to the literature,they present some limitations.…”

Section: Introductionmentioning

confidence: 99%

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Assessing Projection Bias in Consumers’ Food Preferences

Magistris

Gracía

2016

PLoS ONE

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“…Valuations are elicited for use in cost-benefit analysis and to estimate welfare effects. Recently, Briz et al (2015) studied the role of projection bias in experimental auctions by examining the bidding behavior of hungry and non-hungry subjects. They found that the difference in bids between a hot state (hunger) and a cold state (satiation) almost doubled when subjects had to predict their future tastes.…”

Section: Economics Underwent Three Major Transformations In the 20mentioning

confidence: 99%

“…To specify the necessary parameters for the above formulas, we used data from an older 2 nd price experiment for sandwich products conducted also with a Spanish student sample (Briz et al, 2015). For this particulare study, we calculated a value of σ = 0.55 and an intraclass correlation coefficients of ρ = 0.83.…”

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confidence: 99%

Randomization to treatment failure in experimental auctions: The value of data from training rounds

Briz

Drichoutis

Nayga

2017

Journal of Behavioral and Experimental Economics

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In the experimental auctions literature it is common practice to train the potentially unfamiliar subjects in the auction procedure by conducting a few training (often hypothetical) auctions. Data from these practice auctions are rarely reported in scientific papers. We argue that valuable information can be conveyed by looking at data coming from the training rounds of experimental auctions. As a case study, we use data from an experiment that seeks to elaborate on the mediating role of mood states on projection bias. Following a mood induction procedure, subjects are found to bid more under negative mood (as compared to positive mood) for products that are delivered in the future but bid less under negative mood for products that are delivered in present time. We show that if we had neglected insights gained from the training auction data, we would not have been able to detect a failure of randomization to treatment.

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Consumers' willingness to pay for safe and quality milk: Evidence from experimental auctions in Rwanda

Habiyaremye

Mtimet²,

Ouma³

et al. 2023

Agribusiness

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A major concern of the Rwandan government and other dairy stakeholders is the safety and quality of milk that goes through informal delivery systems until it gets to the consumers. Although the government introduced the dairy best practices scheme that stipulates standards and practices for proper handling of raw milk, consumers' willingness to pay (WTP) for such milk has not yet been assessed. It is also unclear whether consumers are aware of and/or value the safety‐ and quality‐related information on types of milk sold in different marketing channels. In this study, we use the second price auction mechanism to elicit consumers' WTP for pasteurized but unpackaged milk in Rwanda and we estimate the effect of providing safety‐ and quality‐related information on WTP using the random‐effect Tobit model. Our results show that consumers are willing to pay a price premium for safe and quality milk, implying that there is an opportunity for market transformation in the dairy sector. Furthermore, we find a positive and significant effect of providing information to consumers on WTP for safe and quality milk. Based on our results, we recommend policies that promote private sector investments in upscaling of milk zones and the establishment of milk‐dispensing machines selling this type of milk. There is also a need for information campaigns that increase consumers' knowledge and awareness of the quality of milk consumed. [EconLit Citations: C34, C91, D12, D44, M31].

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Examining projection bias in experimental auctions: the role of hunger and immediate gratification

Cited by 18 publications

References 36 publications

Assessing Projection Bias in Consumers’ Food Preferences

Assessing Projection Bias in Consumers’ Food Preferences

Randomization to treatment failure in experimental auctions: The value of data from training rounds

Consumers' willingness to pay for safe and quality milk: Evidence from experimental auctions in Rwanda

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