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Journal of Rural Development

Effects of Cheap Talk on Hypothetical Bias

2013.12.21 10682
  • Author
    Choi, Jihyeon
  • Publication Date
    2013.12.21
  • Original

‘Cheap talk’ has been proposed to reduce the hypothetical bias in value elicitation mechanisms. This study explores the effect of cheap talk in laboratory experiments by applying three preference elicitation methods; hypothetical ranking, hypothetical ranking with cheap talk, and non-hypothetical choice. Results indicate that the hypothetical willingness-to-pay (WTP) values are higher than non-hypothetical WTPs, however cheap talk was not effective at reducing hypothetical bias.

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