Reducing Status Quo Bias in Choice Experiments – An Application of a Protest Reduction Entreaty

In stated preference literature, the tendency to choose the alternative representing the status quo situation seems to exceed real life status quo effects. Accordingly, status quo bias can be a problem. In Choice Experiments, status quo bias is found to be strongly correlated with protest attitudes toward the cost attribute. If economic values are to be elicited, this problem is difficult to remedy. In a split sample framework we test a novel ex-ante entreaty aimed specifically at the cost attribute and find that it effectively reduces status quo bias and improves the internal validity of the hypothetical preferences.Choice Experiment, Status Quo Bias, Entreaty, Stated Preference,

Augmenting short Cheap Talk scripts with a repeated Opt-Out Reminder in Choice Experiment surveys

Hypothetical bias remains a major problem when valuing non-market goods with stated preference methods. Originally developed for Contingent Valuation studies, Cheap Talk has been found to effectively reduce hypothetical bias in some applications, though empirical results are ambiguous. We discuss reasons why Cheap Talk may fail to effectively remove hypothetical bias, especially in Choice Experiments. In this light, we suggest augmenting Cheap Talk in Choice Experiments with a so-called Opt-Out Reminder. Prior to each single choice set, the Opt-Out Reminder explicitly instructs respondents to choose the opt-out alternative if they find the experimentally designed alternatives too expensive. In an empirical Choice Experiment survey we find the Opt-Out Reminder to significantly reduce total WTP and to some extent also marginal WTP beyond the capability of the Cheap Talk applied without the Opt-Out Reminder. This suggests that rather than merely adopting the Cheap Talk practice directly from Contingent Valuation, it should be adapted to fit the potentially different decision processes and repeated choices structure of the Choice Experiment format. Our results further suggest that augmenting Cheap Talk with a dynamic Opt-Out Reminder can be an effective and promising improvement in the ongoing effort to remedy the particular types of hypothetical bias that potentially continue to invalidate Choice Experiment surveys.Cheap talk, Opt-Out Reminder, Choice Experiments, hypothetical bias, stream re-establishment, opt-out effect

Gender anomalies in Stated Preference surveys – Are biases really gender dependent?

In this paper, we develop a North-South endogenous growth model to examine thrThe potential for a number of common but severe biases in stated preference method surveys being gender dependent has been largely overlooked in the literature. In this paper we summarize results from three Choice Experiment studies that find evidence in favor of gender differences in vulnerability to biases. Specifically, the results indicate that women are more susceptible to starting point bias than men, while men are more susceptible to hypothetical bias than women. This seems to be interrelated with women inherently being more uncertain than men when choosing from a choice set. Furthermore, we set up a novel theoretical model, which provides an explanation for gender specific susceptibility to biases. We conclude that biases can indeed be gender dependent. Hence, researchers should not simply disregard potential gender differences, but rather take them into account and examine the extent of them when performing surveys. Finally, we give suggestions for future research in this area.Choice Experiment, Gender, Hypothetical bias, Preference Uncertainty, Starting point bias

Dynamic properties of the preferences for renewable energy sources – A wind power experience-based approach

AbstractBased on a Danish survey including respondents with on-shore viewshed experience and varying degrees of off-shore viewshed experience, it is estimated how the different types of wind power experience influence the preferences for wind power, biomass energy and solar energy development in Denmark. The preference relations indicate that on-shore viewshed experience reduces preferences for wind power by 6% and increases preferences for biomass and solar energy solutions relative to wind power by nearly 5%. In contrast, off-shore viewshed experience increases preferences for wind power relative to biomass energy by 24%. However, the effect is dependent on the type of off-shore wind farm experience. Thus, experience of near-shore wind farms can reduce the preferences for wind power. The results also suggest that wind turbines in the viewshed influence the relative preferences between solar energy and biomass energy

Testing the Effect of a Short Cheap Talk Script in Choice Experiments

The application of stated preference methods rests on the assumption that respondents act rationally and that their demand for the non-market good on the hypothetical market is equal to what their real demand would be. Previous studies have shown that this is not the case and this gap is known as hypothetical bias. The present paper attempts to frame the description of the hypothetical market so as to induce more “true market behaviour” in the respondents by including a short Cheap Talk script. The script informs respondents that in similar studies using stated preference methods, people have a tendency to overestimate how much they are willing to pay compared to their actual (true) willingness to pay. Applying a two-split sample approach to a Choice Experiment study focusing on preferences for reducing visual disamenities from offshore wind farms, the Cheap Talk script is found to be a preference mover, but does not affect preferences significantly. Significant effects are found when relating the effect of the Cheap Talk script to the cost levels of the alternatives, in that female respondents are found to choose higher cost alternatives less frequently when presented with the Cheap Talk script, while male respondents are not affected.Cheap Talk, Stated Preferences, Choice Experiment, Hypothetical Bias, Gender

Unilateral Refusals to Deal in Intellectual Property after \u3ci\u3eImage Techical Services, Inc. v. Eastman Kodak Co.\u3c/i\u3e

While the Federal Patent and Copyright Acts give patent and copyright holders limited exclusive rights in intellectual property, the Sherman Act prohibits combinations or conspiracies that restrain trade and monopolization. Although firms possessing intellectual property generally exercise their statutory exclusionary rights without running afoul of the antitrust laws, conduct may plausibly be authorized by intellectual property law but forbidden by antitrust. In construing the two statutory schemes, federal courts have generally held that conduct authorized by the intellectual property laws, in the absence of some further inculpatory action, cannot form the basis for antitrust liability. The Ninth Circuit departed from this trend in the recent opinion of Image Technical Services, Inc. v. Eastman Kodak Co., holding that a unilateral refusal to deal in patented and copyrighted material can alone constitute sufficiently exclusionary conduct to state a section 2 Sherman Act claim for monopolization or attempted monopolization. In so holding, the Ninth Circuit ignored relevant precedent and crafted a test that offers little practical guidance on the limits of a patent or copyright holder\u27s exclusionary powers in the context of a Sherman Act section 2 claim. This Note argues that, while the Ninth Circuit reached the correct conclusion in this case, the court\u27s broad test insufficiently protects holders of intellectual property from antitrust attack for exercising their statutorily-authorized exclusive rights, and offers no compelling tangible benefit to consumers