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Article
Publication date: 27 August 2020

Dieter Koemle and Xiaohua Yu

This paper reviews the current literature on theoretical and methodological issues in discrete choice experiments, which have been widely used in non-market value…

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Abstract

Purpose

This paper reviews the current literature on theoretical and methodological issues in discrete choice experiments, which have been widely used in non-market value analysis, such as elicitation of residents' attitudes toward recreation or biodiversity conservation of forests.

Design/methodology/approach

We review the literature, and attribute the possible biases in choice experiments to theoretical and empirical aspects. Particularly, we introduce regret minimization as an alternative to random utility theory and sheds light on incentive compatibility, status quo, attributes non-attendance, cognitive load, experimental design, survey methods, estimation strategies and other issues.

Findings

The practitioners should pay attention to many issues when carrying out choice experiments in order to avoid possible biases. Many alternatives in theoretical foundations, experimental designs, estimation strategies and even explanations should be taken into account in practice in order to obtain robust results.

Originality/value

The paper summarizes the recent developments in methodological and empirical issues of choice experiments and points out the pitfalls and future directions both theoretically and empirically.

Details

Forestry Economics Review, vol. 2 no. 1
Type: Research Article
ISSN: 2631-3030

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Article
Publication date: 24 September 2018

Carola Grebitus and Jutta Roosen

The purpose of this research is to test how varying the numbers of attributes and alternatives affects the use of heuristics and selective information processing in…

Abstract

Purpose

The purpose of this research is to test how varying the numbers of attributes and alternatives affects the use of heuristics and selective information processing in discrete choice experiments (DCEs). The effects of visual attribute and alternative non-attendance (NA) on respondent choices are analyzed.

Design/methodology/approach

Two laboratory experiments that combined eye tracking and DCEs were conducted with 109 and 117 participants in the USA. The DCEs varied in task complexity by the number of product attributes and alternatives.

Findings

Results suggest that participants ignore both single attributes and entire alternatives. Increasing the number of alternatives significantly increased attribute NA. Including NA in choice modeling influenced results more in more complex DCEs.

Research limitations/implications

The current experiments did not test for choice overload. Future studies could investigate more complex designs. The choice environment affects decision-making. Future research could compare laboratory and field experiments.

Practical implications

Private and public sectors often use DCEs to determine consumer preference. Results suggest that DCEs with two alternatives are superior to DCEs with four alternatives because NA was lower in the two-alternative design.

Originality/value

This empirical research examined effects of attribute and alternative NA on choice modeling using eye tracking and DCEs with varying degrees of task complexity. Results suggest that accounting for NA reduces the risk of over- or understating the impact of attributes on choice, in that one avoids claiming significance for attributes that might not truly be preferred, and vice versa.

Details

European Journal of Marketing, vol. 52 no. 9/10
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 5 May 2015

Linhai Wu, Hongsha Wang and Dian Zhu

The purpose of this paper is to reveal the actual consumer demand for traceable pork by investigating consumer preferences for pork with combined levels of traceability…

Abstract

Purpose

The purpose of this paper is to reveal the actual consumer demand for traceable pork by investigating consumer preferences for pork with combined levels of traceability information based on differences in individual consumer preferences, in order to support the government in decision making regarding the gradual construction of safe food markets.

Design/methodology/approach

Combinations of four types of traceability information, including farming, slaughter and processing, distribution and sales, and government certification, with price were randomly designed. To identify consumer preferences for these attribute combinations of traceable pork, 215 consumers in Wuxi, Jiangsu Province were investigated using a real choice experiment and the mixed logit model.

Findings

Significant heterogeneity was observed in consumer preferences for traceable pork. The information of farming, slaughter and processing, distribution and marketing, and government certification could significantly improve consumer utility. Moreover, consumers had the highest preference for government certification information.

Originality/value

Although numerous studies have been performed on consumer preferences for food safety attributes using a real choice experiment, almost none of them focus on Chinese consumers. Therefore, this study is an attempt to fill this gap. The conclusions of this study can serve as a reference for the Chinese government in developing safe food consumption policies. Although Chinese consumers have cried out for improvement of pork safety, they have different preferences for traceability information; thus, the government must promote traceable food step-by-step, using consumer preferences as a starting point.

Details

China Agricultural Economic Review, vol. 7 no. 2
Type: Research Article
ISSN: 1756-137X

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Article
Publication date: 17 April 2020

Tommy Gärling, Dawei Fang, Martin Holmen and Patrik Michaelsen

The purpose of this paper is to investigate how social comparison and motivation to compete account for elevated risk-taking in fund management corroborated by asset…

Abstract

Purpose

The purpose of this paper is to investigate how social comparison and motivation to compete account for elevated risk-taking in fund management corroborated by asset market experiments when performance depends on rank-based incentives.

Design/methodology/approach

In two laboratory experiments, university students (n1 = 240/n2 = 120) make choices between risky and certain outcomes of hypothetical sums of money. Both experiments investigate in which direction risky choices in an individual condition (individual risk preference) are shifted when participants compare their performance to another participant's performance (social comparison), being instructed or not to outperform the other (incentive to compete).

Findings

In the absence of incentives to compete, participants tend to minimize the differences between expected outcomes to themselves and to the other, but when provided with incentives to compete, they tend to maximize these differences. An independent additional increase in risk-taking is observed when participants are provided with incentives to compete.

Originality/value

Original findings include that social comparison does not evoke motivation to compete unless incentives are offered and that increases in risk-taking depend both on what the other chooses and the incentives.

Details

Review of Behavioral Finance, vol. 13 no. 2
Type: Research Article
ISSN: 1940-5979

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Article
Publication date: 6 March 2017

Alexander Schjøll and Frode Alfnes

The purpose of this paper is to illustrate and discuss methodology issues in menu-labelling experiments in commercial full-service restaurants, and to investigate how the…

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1229

Abstract

Purpose

The purpose of this paper is to illustrate and discuss methodology issues in menu-labelling experiments in commercial full-service restaurants, and to investigate how the menu description and price affects customers’ choice of an organic veal entrée in a Norwegian restaurant.

Design/methodology/approach

A menu-labelling experiment was conducted in a fine-dining restaurant during ordinary opening hours over a period of two weeks. The menu description of an organic veal entrée was altered repeatedly and the effect of these changes on the sales of this entrée was investigated.

Findings

Adding words to the menu description, such as “organic”, or describing animal welfare had a very limited effect on customers’ choices in the restaurant.

Research limitations/implications

The research illustrates the use of a natural field experiment in a commercial full-service restaurant and discusses strengths and weaknesses of the methodology.

Originality/value

Few experiments have been performed on the effect on credence attributes in commercial full-service restaurants and there is little knowledge about research challenges in menu-labelling experiments. This paper contributes to the knowledge on both issues by conducting a natural field experiment in a fine-dining restaurant.

Details

British Food Journal, vol. 119 no. 3
Type: Research Article
ISSN: 0007-070X

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Abstract

Details

Travel Survey Methods
Type: Book
ISBN: 978-0-08-044662-2

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Article
Publication date: 21 September 2012

Zein Kallas and José Maria Gil

This paper seeks to analyze consumer preferences toward fresh rabbit meat and obstacles and interest in consuming the product.

Abstract

Purpose

This paper seeks to analyze consumer preferences toward fresh rabbit meat and obstacles and interest in consuming the product.

Design/methodology/approach

The paper uses the dual response choice experiment (DRCE) design which allows for analyzing forced and unforced options in choice experiments using the same sample. The heteroscedastic extreme‐value (HEV) model is used due to its relaxation of the restrictive assumption made in the multinomial logit model regarding the identically distributed error term across alternatives. The empirical analysis uses consumer‐level questionnaires to elicit information regarding consumer attitudes toward rabbit meat in Catalonia (Spain).

Findings

The results demonstrate a higher preference for rabbit meat from “Catalan” origin followed by higher quality certification information. Convenience and “ready‐to‐eat” products made from rabbit meat may help bolster increased consumption. An effective communication campaign is needed to educate individuals regarding the health characteristics of rabbit compared to other types of meat. Furthermore, results demonstrate that the ordering of attributes is not significantly different from forced and non‐forced choices obtained from the DRCE design. However, significant differences on the magnitude of the preferences for some attributes' levels are found.

Research limitations/implications

From a methodological point‐of‐view, the study follows a similar design to the dual response choice experiments. However, the study is differentiated by asking consumers whether they are willing to buy the product. More emphasis is made on the purchasing context of the task leading consumers to focus more on their budget constraints by considering the price. The study uses the DRCE design as an alternative of the traditional single stage choice experiments. Owing to budgets constraint, the study could be improved by comparing results from both designs. At the empirical level, it would be interesting to extend the study to other geographical parts in Spain.

Social implications

The study can help policy makers in stimulating demand for rabbit meat. Rabbit meat farmers in Catalonia were forced to abandon their farms due to the lack of demand. Consumption has decreased dramatically. As recommended in the paper, high quality labelling of the meat, improving the carcass format and its presentation and the healthiest characteristic of the meat could be a good way to promote and stimulate demand.

Originality/value

From the empirical point‐of‐view, this study, to the authors' knowledge, is the first application of CE and CV to analyze consumers' preferences towards rabbit meat. Furthermore, it is the first paper that applies the HEV model in agro‐food economics and specifically towards rabbit meat.

Details

British Food Journal, vol. 114 no. 10
Type: Research Article
ISSN: 0007-070X

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Book part
Publication date: 3 June 2008

Susan K. Laury and Charles A. Holt

This paper reports a new experimental test of the notion that behavior switches from risk averse to risk seeking when gains are “reflected” into the loss domain. We…

Abstract

This paper reports a new experimental test of the notion that behavior switches from risk averse to risk seeking when gains are “reflected” into the loss domain. We conduct a sequence of experiments that allows us to directly compare choices under reflected gains and losses where real and hypothetical payoffs range from several dollars to over $100. Lotteries with positive payoffs are transformed into lotteries over losses by multiplying all payoffs by –1, that is, by reflecting payoffs around zero. When we use hypothetical payments, more than half of the subjects who are risk averse for gains turn out to be risk seeking for losses. This reflection effect is diminished considerably with cash payoffs, where the modal choice pattern is to exhibit risk aversion for both gains and losses. However, we do observe a significant difference in risk attitudes between losses (where most subjects are approximately risk neutral) and gains (where most subjects are risk averse). Reflection rates are further reduced when payoffs are scaled up by a factor of 15 (for both real and hypothetical payoffs).

Details

Risk Aversion in Experiments
Type: Book
ISBN: 978-1-84950-547-5

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Article
Publication date: 8 April 2014

Christian Schlereth

In cooperation with a German online retail bank, the aim of this paper is to investigate how the bank should price a new fee-only financial advisory service. Two types of…

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1120

Abstract

Purpose

In cooperation with a German online retail bank, the aim of this paper is to investigate how the bank should price a new fee-only financial advisory service. Two types of pricing plans differ in terms of their strategies for determining monthly prices: a fixed monthly price that is identical for all clients (i.e. a flat pricing plan) or a monthly price that varies as a function of each client's assets under management (i.e. a volume pricing plan).

Design/methodology/approach

With a discrete choice experiment, this article studies client preferences for the two types of plans. To ensure that the respondents understood the financial consequences of their decisions, a price calculator was embedded into the discrete choice experiment to enable the respondents to determine their individual monthly prices based on their assets under management.

Findings

Methodologically, the price calculator is useful for simplifying mathematically complex decisions, and it provides additional valuable information for analysis. Substantively, the results show that clients perceive both types of pricing plans as equally attractive; however, the service provider's revenues would increase by up to 12 per cent if it uses the volume pricing plan.

Originality/value

This research extends the stream of literature on the measurement of pricing plan preferences and offers guidance for service industries, such as telecommunications, cloud computing services, insurances, or transportation. It extends the use of discrete choice experiments to study client preferences for different pricing plans and also integrates a decision aid, i.e. a price calculator, in the experiment to assist clients in comparing alternatives more effectively.

Details

European Journal of Marketing, vol. 48 no. 3/4
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 6 June 2016

Keqiang Wang, Hongmei Liu, Wuyang Hu and Linda Cox

Dolphin excursions have become increasingly popular worldwide. Many past studies assessing the value of dolphin excursions use choice-based methods such as the conjoint…

Abstract

Purpose

Dolphin excursions have become increasingly popular worldwide. Many past studies assessing the value of dolphin excursions use choice-based methods such as the conjoint analysis. However, this method is often criticized as being hypothetical. The purpose of this paper is to describe a relatively low cost but effective approach to enhance understanding of consumer preference obtained by conjoint analysis. The method relies heavily on using internet-based survey tools.

Design/methodology/approach

Enabled by an online tool, individuals are asked to self-explicate their preferred alternatives using the same attributes as are found in the conjoint design. The difference between the self-constructed, preferred alternatives and those offered in conjoint experiment are incorporated into choice models. Unlike previous research where only rough estimates can be provided, the proposed method allows precise capture of respondents’ preferred alternative through the automated online survey design.

Findings

Results show that although the extra effort involved in data collection is small, the gain in model fit, choice interpretation, and the value (welfare) estimation is sizeable. Evidence indicates that consumers would be willing to pay up to $50 more for adventurous excursions and guarantees that they will interact with dolphins could worth up to $70 per trip. The approach presented in this paper can also serve as a method to test for preference consistency.

Originality/value

This study is the first using an online survey to assess values associated with dolphin excursion. It describes the benefit of involving online tools to enhance modeling and interpretation of consumer behavior. Applications of internet-based surveys on household consumer products are abundant (such as food and electronics) but this study offers a much less discussed application in environmental service.

Details

Internet Research, vol. 26 no. 3
Type: Research Article
ISSN: 1066-2243

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