Relative willingness to pay and surplus comparison mechanism in experimental auctions

Pierre Combris, PINTO Alexandra Seabra and HERAUD Eric Giraud

Cahiers du GREThA (2007-2019) from Groupe de Recherche en Economie Théorique et Appliquée (GREThA)

Abstract: We study the relative willingness-to-pay (WTP) of consumers according to the diversity of supply in a market and we show how the presence of substitutes for a given product leads to question the incentive mechanisms commonly used in experimental auctions. We propose a Surplus Comparison Mechanism (SCM) in order to yield WTP estimates which better take into account the choice set available to consumers. After showing the efficiency of this mechanism we test the SCM in a laboratory experiment, reconsidering WTP for food environmental certifications (Integrated Pest Management and Organic certification). It appears that WTPs are decreasing when more alternative certifications are offered to consumers.

Keywords: Experimental Auctions; Willingness to pay; Consumers’ surplus; Choice alternatives; Food certification. (search for similar items in EconPapers)
JEL-codes: C91 D44 Q51 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-agr, nep-cbe, nep-dcm, nep-env, nep-exp and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:grt:wpegrt:2015-20

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