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Eliciting willingness-to-pay to decompose beliefs and preferences that determine selection into competition in lab experiments

Author

Listed:
  • Chen, Yvonne Jie
  • Dutz, Deniz
  • Li, Li
  • Moon, Sarah
  • Vytlacil, Edward
  • Zhong, Songfa
Abstract
This paper develops a partial-identification methodology for analyzing self-selection into alternative compensation schemes in a laboratory environment. We formulate a model of self-selection in which individuals select the compensation scheme with the largest expected valuation, which depends on individual- and scheme-specific beliefs and non-monetary preferences. We characterize the resulting sharp identified sets for individual-specific willingness-to-pay, subjective beliefs, and preferences, and develop conditions on the experimental design under which these identified sets are informative. We apply our methods to examine gender differences in preference for winner-take-all compensation schemes. We find that what has commonly been attributed to a gender difference in preference for performing in a competition is instead explained by men being more confident than women in their probability of winning a future (though not necessarily a past) competition.

Suggested Citation

  • Chen, Yvonne Jie & Dutz, Deniz & Li, Li & Moon, Sarah & Vytlacil, Edward & Zhong, Songfa, 2024. "Eliciting willingness-to-pay to decompose beliefs and preferences that determine selection into competition in lab experiments," Journal of Econometrics, Elsevier, vol. 243(1).
    • Handle: RePEc:eee:econom:v:243:y:2024:i:1:s0304407623003688
    DOI: 10.1016/j.jeconom.2023.105652
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    Keywords

    Elicitation; Partial identification; Experiment; Gender difference;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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