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1 – 10 of over 1000
Article
Publication date: 26 August 2014

Hans De Steur, Filiep Vanhonacker, Shuyi Feng, Xiaoping Shi, Wim Verbeke and Xavier Gellynck

Experimental auctions are widely used as a non-hypothetical value elicitation method to examine consumer preferences for novel, controversial foods. However, despite its…

Abstract

Purpose

Experimental auctions are widely used as a non-hypothetical value elicitation method to examine consumer preferences for novel, controversial foods. However, despite its advantages over hypothetical methods, its practice might lead to a wide variety of biases. The purpose of this paper is to provide a list of key cognitive biases and design effects in food auction research and to deliver scientifically underpinned procedures in order to assess, control and reduce them. Its applicability and relevance is examined in auctions on willingness-to-pay for folate (GM) biofortified rice.

Design/methodology/approach

Based on auction literature, a list of 18 biases has been developed. Experimental auctions were conducted with 252 women from Shanxi Province, China to test the occurrence of eight biases, while demonstrating measures to reduce the risk of ten biases.

Findings

The results lend support for three information-related effects, i.e. confirmation bias, conflicting product information effects and a primacy bias, but not for a multiple-good valuation effect, a panel size effect, a trial winner effect and time-related sampling biases. Furthermore, there are no clear indications of social desirability bias, auction fever and a false consensus effect.

Research limitations/implications

This study emphasizes the need to take into account, and measure the risk of various biases when developing, organizing and interpreting experimental auctions. Future research should further extend the list of biases and validate the study findings.

Originality/value

By using a highly topical subject, this study is one of the first to address the potential risk of cognitive biases and design effects in experimental (food) auctions.

Details

China Agricultural Economic Review, vol. 6 no. 3
Type: Research Article
ISSN: 1756-137X

Keywords

Book part
Publication date: 16 January 2014

Martin Sefton and Ping Zhang

We compare allocation rules in uniform price divisible-good auctions. Theoretically, a “standard allocation rule (STANDARD)” and a “uniform allocation rule (UNIFORM)”…

Abstract

Purpose

We compare allocation rules in uniform price divisible-good auctions. Theoretically, a “standard allocation rule (STANDARD)” and a “uniform allocation rule (UNIFORM)” admit different types of low-price equilibria, which are eliminated by a “hybrid allocation rule (HYBRID).” We use a controlled laboratory experiment to compare the empirical performances of these allocation rules.

Design/methodology/approach

We conduct three-bidder uniform price divisible-good auctions varying the different allocation rules (standard, uniform, or hybrid) and whether or not explicit communication between bidders is allowed. For the case where explicit communication is allowed we also study six-bidder auctions.

Findings

We find that prices are similar across allocation rules. Under all three allocation rules, prices are competitive when bidders cannot explicitly communicate. With explicit communication, prices are collusive, and we observe collusive prices even when collusive agreements are broken. Collusive agreements are particularly fragile when the gain from a unilateral deviation is larger, and an implication of this is that collusive agreements are more robust under STANDARD.

Research limitations/implications

We do not find conclusive evidence of differences in performance among allocation rules. However, there is suggestive evidence that STANDARD may be more vulnerable to collusion.

Originality/value

Divisible-good uniform price auctions are used in financial markets, but it is not possible to use naturally occurring data to test how alternatives to the standard format would perform. Using laboratory methods we provide an initial test of alternative allocation rules.

Details

Experiments in Financial Economics
Type: Book
ISBN: 978-1-78350-141-0

Keywords

Article
Publication date: 3 July 2020

Claudia Meier, Nadja El Benni, Srinivasaiah Sakamma, Simon Moakes, Christian Grovermann, Sylvain Quiédeville, Hanna Stolz, Matthias Stolze and K. Basegowda Umesh

Biofortification of staple crops is a promising strategy to alleviate micronutrient deficiencies in rural populations of the developing world. The possibility to sell…

Abstract

Purpose

Biofortification of staple crops is a promising strategy to alleviate micronutrient deficiencies in rural populations of the developing world. The possibility to sell biofortified crops at “a good market price” plays a vital role for the acceptance by smallholder farmers. This study is therefore focused on non-farming consumers' willingness to pay (WTP) for biofortified crops.

Design/methodology/approach

Specifically, we elicited non-farming consumers' WTP a premium for the improved iron content (+30% iron) in a 1kg finger millet bag using a 2nd price Vickrey auction with six auction rounds and one health- and one process-related information treatment. Due to multiple bids per subject, premiums were analyzed using a linear mixed-effects model, controlling for market feedback and auction round.

Findings

Despite more than half of the respondents being skeptical toward new crop varieties, the acceptance rate was very high (98% with a WTP above zero). The average premium amounted to 27% and could be significantly increased with the provision of health-related information. In contrast, information about the breeding method was ineffective. The WTP was significantly higher for higher income and lower for higher age, education and skepticism toward new crop varieties and increased with increasing rounds.

Research limitations/implications

Our results suggest that non-farming consumers are willing to pay “a good market price” for iron-biofortified finger millet. Our analysis also confirms the importance of health-related information for raising consumers' WTP. This information supports the further development and introduction of biofortified crops to alleviate micronutrient malnutrition.

Originality/value

This study adds to the still limited literature on consumers' WTP for iron-biofortified crops in India, focusing on non-farming consumers to assess the price such crops can achieve on the market.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 10 no. 5
Type: Research Article
ISSN: 2044-0839

Keywords

Article
Publication date: 1 September 2002

Francisco Soler, José M. Gil and Mercedes Sánchez

Organic production and its consumption have grown tremendously in recent years. However, in the case of Spain demand still represents only 1 per cent of food expenditure…

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Abstract

Organic production and its consumption have grown tremendously in recent years. However, in the case of Spain demand still represents only 1 per cent of food expenditure. The main obstacle seems to be that organic food faces problems related to consumers’ acceptability; lack of food availability and seasonality make it difficult to establish appropriate retailing outlets; also, higher costs of production and retailer margins jointly may result in higher prices than consumers are willing to pay for organic food attributes. Research studies have mostly elicited consumers’ willingness‐to‐pay (WTP) for organic food through contingent valuation. Alternatively, explores, using an experimental second‐price sealed‐bid auction, the value that consumers place on organic food and the effect that information included on ecolabel and physical appearance have on their WTP. This methodological approach involves the use of real money and real products, which, in fact, may overcome the hypothetical bias detected in previous studies. Also discusses the effect on WTP of consumers’ demographic characteristics and lifestyles, as well as attitudes towards food safety and buying behaviour. Results show, that as more accurate information is offered, consumers’ acceptability of labelled organic food products increases; and that WTP is highly correlated with consumption habits variables.

Details

British Food Journal, vol. 104 no. 8
Type: Research Article
ISSN: 0007-070X

Keywords

Book part
Publication date: 17 March 2010

Jeffrey Carpenter, Jessica Holmes and Peter Hans Matthews

To transform donations “in kind” into cash, charities of all sizes use auctions and raffles. Despite this, neither the theory nor the practice of efficient fund-raising …

Abstract

To transform donations “in kind” into cash, charities of all sizes use auctions and raffles. Despite this, neither the theory nor the practice of efficient fund-raising – and, in particular, charity auctions – has received sufficient attention from economists, especially the fact that participation in fund-raisers is endogenous. We describe, in detail, the design and implementation of an experiment to examine 15 charity auction mechanisms. While some of the mechanisms have already received attention from both theorists and empiricists, ours is the first comprehensive examination of all existing mechanisms and the first to explore the potential of a few new formats. Our analysis focuses on participation differences among the formats and how theory and supplemental survey data can help explain some of these differences.

Details

Charity with Choice
Type: Book
ISBN: 978-1-84950-768-4

Article
Publication date: 28 January 2014

Ji Yong Lee, Doo Bong Han, Rodolfo M. Nayga Jr and Jong Min Yoon

– The purpose of this paper is to assess Korean consumers' valuation for domestic rice and imported rice from China and the USA.

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Abstract

Purpose

The purpose of this paper is to assess Korean consumers' valuation for domestic rice and imported rice from China and the USA.

Design/methodology/approach

In order to identify Korean consumers' willingness to pay (WTP) for domestic, Chinese, and US rice, the non-hypothetical experimental auction approach (i.e. the random nth price auction) was utilized. Auction participants were randomly assigned to three treatments: no labelling information, country of origin labelling information, and food miles labelling information to analyze the effects of differing labelling information on consumers' valuation.

Findings

The results suggest that Korean consumers have a positive perception of and preference for domestic rice, particularly when country of origin information is provided. However, food miles information alone may not help consumers to distinguish between domestic and Chinese rice.

Originality/value

The marketing of imported rice will increase since Korea will be opening its rice market under tariffication after 2015. Therefore, it is necessary for Korea and other exporting countries to identify the feasibility of marketing both domestic and imported rice, and also to investigate which rice from specific countries Korean consumers prefer. Therefore, the authors conducted the random nth price auction using real rice products and cash in transactions.

Details

China Agricultural Economic Review, vol. 6 no. 1
Type: Research Article
ISSN: 1756-137X

Keywords

Open Access
Article
Publication date: 30 June 2022

Le Bo and Xiaoli Yang

Consumers' willingness to pay premium (WTPP) for two different types of agricultural brand labels (enterprise and regional), are evaluated through a non-hypothetical…

Abstract

Purpose

Consumers' willingness to pay premium (WTPP) for two different types of agricultural brand labels (enterprise and regional), are evaluated through a non-hypothetical Random n-price auction experiment during the online purchase of fresh agricultural products. The purpose of this paper is to evaluate the two WTPP, compare their differences, and explore their sustainability.

Design/methodology/approach

Data were collected in July–August 2020 from a sample of 310 consumers in Liaoning Province, China. A nonhypothetical random n-price auction experiment was implemented in a simulated online shopping environment.

Findings

The results show that WTPP exists, and WTPP level of regional brand labels is higher than that of enterprise brand labels. Consumers' WTPP is sustainable. Consumers with low WTPP for enterprise brand labels and consumers with high WTPP for regional brand labels have stronger willingness to repurchase.

Practical implications

The results have direct practical implications for developing brand agriculture and encouraging “brand consumption”. The results can provide theoretical reference for policymakers, enlightenment for the development and effective dissemination of agricultural brand labels and important information to e-retailers on how to sale agricultural products with agricultural brand labels.

Originality/value

To the best of the authors' knowledge, no previous study has related WTPP and its sustainability for agricultural brand labels in China. We try to fill a gap in literature on consumers' WTPP for agricultural brand labels. And the authors explore the sustainability of WTPP by analyzing the impact of WTPP on repurchase intention and recommendation intention respectively.

Details

British Food Journal, vol. 124 no. 13
Type: Research Article
ISSN: 0007-070X

Keywords

Article
Publication date: 2 May 2017

Alemayehu Dekeba Bekele, Joost Beuving and Ruerd Ruben

The purpose of this paper is to examine the effect of health information and sensory attributes on consumer’s propensity to upgrade and their willingness to pay (WTP) for…

Abstract

Purpose

The purpose of this paper is to examine the effect of health information and sensory attributes on consumer’s propensity to upgrade and their willingness to pay (WTP) for pasteurized milk in Ethiopia.

Design/methodology/approach

The authors used a framed market experiment with 160 participants in 14 central locations in urban Ethiopia. The authors used a double hurdle model to analyze consumer willingness to shift to pasteurized milk and their WTP for quality attributes in pasteurized milk.

Findings

Consumers are willing to pay a 4 percent premium for quality attributes in pasteurized milk. Male and employed participants are willing to shift and pay a premium for pasteurized milk. Conversely, consumers with more children, higher income, and higher raw milk consumption are less likely to shift to pasteurized milk. These results also show that taste is negatively related to consumer propensity to upgrade to pasteurized milk. Further, about half of the consumers who were provided with health information are willing to pay a premium of 11 percent for pasteurized milk, whereas others would pay only 6 percent. After providing the treatment group with health information, those consumers with higher income, old people and consumers with children are less likely to shift to pasteurized milk. Overall, consumer preference for raw milk is the result of taste, perceived nutrition and perceived health benefits. The study points at a segmented milk market and the consequent need for the provision of a targeted milk market promotion.

Research limitations/implications

The application of experimental auctions in developing countries requires an extensive learning exercise for participants.

Originality/value

The authors used a non-hypothetical valuation mechanism to unravel the effect of subjective and intrinsic milk attributes in fluid milk choice decisions and its variation across socio-economic groups in a developing country context.

Details

International Journal of Quality & Reliability Management, vol. 34 no. 5
Type: Research Article
ISSN: 0265-671X

Keywords

Article
Publication date: 2 November 2015

Mo Chen, Shijiu Yin, Yingjun Xu and Zhiwei Wang

– The purpose of this paper is to determine consumers’ willingness to pay (WTP) for tomatoes carrying different organic labels.

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Abstract

Purpose

The purpose of this paper is to determine consumers’ willingness to pay (WTP) for tomatoes carrying different organic labels.

Design/methodology/approach

The data were collected from 878 randomly selected consumers in Shandong Province, China, using the Becker-DeGroot-Marschak auction experiment. The authors used the multivariate probit (MVP) model to analyze the factors influencing consumer preferences.

Findings

Results indicated that consumers’ WTP for tomatoes carrying the European Union (EU) organic label was significantly higher than those carrying the Chinese organic label. However, no significant difference was found between consumers’ WTP for tomatoes carrying the EU organic label and that for tomatoes carrying both Chinese and EU labels. The results of the MVP model analysis demonstrated that the consumers with different individual characteristics had heterogeneous preferences for organic labels. Food safety consciousness and organic knowledge both had positive effects on consumers’ WTP, meanwhile, environmental awareness had no prominent effect on consumer preferences.

Originality/value

This research is of academic value and of value to policy makers and suppliers. To satisfy diverse market requirements, governments, and manufacturers should consider consumer preferences for different certification labels in strategy development.

Details

British Food Journal, vol. 117 no. 11
Type: Research Article
ISSN: 0007-070X

Keywords

Article
Publication date: 15 August 2016

Nelson A. Barber, D. Christopher Taylor and Daniel Remar

Consumer marketing suggests that greater concern for the environment is impacting purchase behavior. Recent surveys into US pro-environmental (PE) purchase patterns show a…

Abstract

Purpose

Consumer marketing suggests that greater concern for the environment is impacting purchase behavior. Recent surveys into US pro-environmental (PE) purchase patterns show a considerable gap between consumers’ attitude and actual behavior regarding PE products. What these products have in common is a normative component. This research aims to understand whether perceived consumer effectiveness (PCE) and social desirability bias (SDB) influence consumers’ purchase decisions regarding PE wine products and willingness to pay (WTP).

Design/methodology/approach

To assess whether PCE and SDB influence consumer’s actual WTP for PE and conventional wine despite normative beliefs (NBs), two studies with sample sizes of 117 and 124 were conducted in the USA. The first part of each study involved surveying participants as to their NB, SDB, PCE and demographics. The second part of the study measured their actual WTP through participation in an experimental auction.

Findings

Consumers with high levels of NBs were significantly more likely to pay higher premiums for PE wines compared to non-PE wines and had higher levels of PCE, suggesting that they believe their purchase behavior makes a difference to the environment. However, this same group is strongly influenced by SDB, indicating that they may “over-report” desirable behaviors. Controlling for PCE and SDB, the significant difference in price for PE wine and non-PE wine was mitigated. Those with lower NBs were just the opposite, less concerned whether their purchase behavior directly impacts the environment, feeling that non-PE wine may be a better value proposition.

Research limitations/implications

The use of an auction method to assess actual behavior may be skewed by the attempt to get a winning bid, and this research was conducted in one particular part of the USA, which limits the generalizability of the results to other parts of the country or world.

Originality/value

The findings from the current research provide important information for wine producers, distributors and retailers, specifically the development of marketing and branding strategies, and as a method for normative product/brand differentiation in a competitive marketplace.

Details

International Journal of Wine Business Research, vol. 28 no. 3
Type: Research Article
ISSN: 1751-1062

Keywords

1 – 10 of over 1000