Experimental Methods and Elicitation of Values

Authors: Harrison G.W.¹; Harstad R.M.²; Rutström E.E.³

Source: Experimental Economics, Volume 7, Number 2, June 2004 , pp. 123-140(18)

Publisher: Springer

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Abstract:

Experimental methods are currently being extensively used to elicit subjective values for commodities and projects. Three methodological problems are not systematically addressed in this emerging literature. The first is the potential for laboratory responses to be censored by field opportunities, so that lab responses can be confounded by uncontrolled knowledge of the field; the second is the potential for subjective perceptions about field opportunities, and hence valuation responses, to be affected by the institution used to elicit values; and the third is the potential for some elicitation institutions to influence subjective perceptions of characteristics of the commodity or project being valued, and hence change the very commodity being valued. All three problems result in potential loss of control over the value elicitation process. For example, we show that censoring affects conclusions drawn in a major study of beef packaging valuation. We derive implications for experimental designs that minimize the potential effect of these methodological problems.

Keywords: experiments; valuation; auctions; incentive-compatibility

Document Type: Research article

DOI: http://dx.doi.org/10.1023/B:EXEC.0000026975.48587.f0

Affiliations: 1: Department of Economics, College of Business Administration, University of Central Florida, Orlando, Florida, USA., Email: Gharrison@bus.ucf.edu 2: Department of Economics, University of Missouri-Columbia, Columbia, Missouri, USA., Email: harstadr@missouri.edu 3: Department of Economics, College of Business Administration, University of Central Florida, Orlando, Florida, USA., Email: Erutstrom@bus.ucf.edu

Publication date: 2004-06-01