ALTERNATIVE CALIBRATION AND AUCTION INSTITUTIONS FOR PREDICTING CONSUMER WILLINGESS TO PAY FOR NONGENETICALLY MODIFIED CORN CHIPS
By: Lusk, Jayson L.; Daniel, M. Scott; Mark, Darrell R.; Lusk, Christine L.
Lusk, Jayson L.; Daniel, M. Scott; Mark, Darrell R.; Lusk, Christine L., ALTERNATIVE CALIBRATION AND AUCTION INSTITUTIONS FOR PREDICTING CONSUMER WILLINGESS TO PAY FOR NONGENETICALLY MODIFIED CORN CHIPS, Journal of Agricultural and Resource Economics, Volume 26, Issue 1, July 2001, Pages 40-57
This study explores two important issues in experimental economics: calibration and auction institution. Consumer willingness-to-pay bids for corn chips made with non-genetically modified ingredients are elicited in first- and second-price auctions. Results suggest that responses to scale-differential questions, elicited in a survey, accurately predicted consumer willingness-to-pay bids. While the second-price auction induced a greater percentage of marginal bidders to offer a positive bid compared to the first-price auction, average bid levels in the first- and second-price auctions were not statistically different from one other. In a small and unrepresentative sample, 70% of student participants were unwilling to pay to exchange a bag of chips made from genetically modified ingredients for a bag of chips made from nongenetically modified ingredients. However, 20% of respondents were willing to pay at least $0.25/oz. for the exchange.