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- Title
Is Cheap Talk Effective at Eliminating Hypothetical Bias in a Provision Point Mechanism?
- Authors
Murphy, James; Stevens, Thomas; Weatherhead, Darryl
- Abstract
Significant difference between response to real and hypothetical valuation questions is often referred to as hypothetical bias. Some economists have had success with using “cheap talk” (which entails reading a script that explicitly highlights the hypothetical bias problem before participants make any decisions) as a means of generating unbiased responses in a referendum format. In this article, we test the robustness of cheap talk using a voluntary contribution mechanism with a provision point over a wide range of possible payment amounts. Our results confirm the existence of hypothetical bias, and suggest that cheap talk may eliminate hypothetical bias, but only for respondents facing higher payments.
- Subjects
PREJUDICES; PAYMENT; ENVIRONMENTAL economics; ECONOMICS; REFERENDUM; VALUATION
- Publication
Environmental & Resource Economics, 2005, Vol 30, Issue 3, p327
- ISSN
0924-6460
- Publication type
Article
- DOI
10.1007/s10640-004-4224-y