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Jayson L Lusk, Ted C Schroeder

Cited by*: 125 Downloads*: 80

This study compares hypothetical and nonhypothetical responses to choice experiment questions. We test for hypothetical bias in a choice experiment involving beef ribeye steaks with differing quality attributes. In general, hypothetical responses predicted higher probabilities of purchasing beef steaks than nonhypothetical resposnes. Thus, hypothetical choices overestimate total willingness-to-pay for beef steaks. However, marginal willingness-to-pay for a change in steak quality is, in general, not statistically different across hypothetical and actual payment settings.

Ty Feldkamp, Jayson L Lusk, Ted C Schroeder

Cited by*: 57 Downloads*: 47

Despite increased use of experimental auctions, a myriad of different procedures are being employed without formal consideration of how the procedures might affect results. The study investigates the effect of several procedural issues on valuation estimates from experimental auctions. Results indicate the second price auction generates higher valuations than English, Becker-DeGroot-Marschak (BDM), and random nth price auctions, especially in latter bidding rounds, and that random nth price auction yields lower valuations than English and BDM auctions. We find that endowing subjects with a good prior to eliciting bids can have an impact on valuationsk, but the effect varies across auction mechanism.

John A Fox, Mohammad Koohmaraie, Jayson L Lusk, James Mintert, Ted C Schroeder

Cited by*: 60 Downloads*: 10

Experimental methods were used to examine consumer willingness-to-pay for steak tenderness in a grocery store setting. When relying on a taste test alone to determine product quality, the participants paid an average premium of $1.23/lb for a tender versus tough steak. Fifty-one percent of the participants were willing to pay an average of $1.84/lb when they had completed a taste test and were also provided information about the steak's tenderness. Results indicate that most consumers prefer more tender steaks and that many are willing to pay a premium for tender steaks.