Journal
AMERICAN JOURNAL OF AGRICULTURAL ECONOMICS
Volume 85, Issue 4, Pages 840-856Publisher
BLACKWELL PUBLISHERS
DOI: 10.1111/1467-8276.00492
Keywords
contingent valuation; genetically-modified foods; hypothetical bias
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A large body of literature suggests willingness-to-pay is overstated in hypothetical valuation questions as compared to when actual payment is required. Recently, cheap talk has been proposed to eliminate the potential bias in hypothetical valuation questions. Cheap talk refers to process of explaining hypothetical bias to individuals prior to asking a valuation question. This study explores the effect of cheap talk in a mass mail survey using a conventional value elicitation technique. Results indicate that cheap talk was effective at reducing willingness-to-pay for most survey participants; however, consistent with previous research, cheap talk did not reduce willingness-to-pay for knowledgeable consumers.
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