nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2013‒10‒05
five papers chosen by
Edoardo Marcucci
Universita' di Roma Tre

  1. Pirates in the lab. Using incentivized choice experiments to explore preference for (un)authorized content. By Piotr Ćwiakowski; Marek Giergiczny; Michał Krawczyk
  2. Feasibility Study on the Valuation of Public Goods and Externalities in EU Agriculture By Livia Madureira; Jose Lima Santos; Ana Ferreira; Helena Guimarães
  3. Increasing Organ Donation via Changes in the Default Choice or Allocation Rule By Danyang Li; Zackary Hawley; Kurt Schnier
  4. Substitution and Complementarity between Fixed-line and Mobile Access By Lukasz Grzybowski; Frank Verboven
  5. Intuition and Reasoning in Choosing Ambiguous and Risky Lotteries By Ralf Bergheim; Michael W.M. Roos

  1. By: Piotr Ćwiakowski (Faculty of Economic Sciences, University of Warsaw); Marek Giergiczny (Faculty of Economic Sciences, University of Warsaw); Michał Krawczyk (Faculty of Economic Sciences, University of Warsaw)
    Abstract: We report a laboratory experiment aimed at investigating factors affecting choice between different versions of a full-length movie. In particular, we estimate the willingness to pay for a legal, rather than pirated copy and compare it to the impact of such characteristics as picture quality or delay in delivery. We find a modest but highly significant preference for the authorized version. By conducting otherwise identical choice experiments both with and without actual experiential and monetary consequences, we conclude that the method does not seem to suffer from hypothetical bias. We also find that when the proceeds from legal sale are transferred to a good cause, willingness to pay for the unauthorized copy is reduced.
    Keywords: digital piracy, choice experiments
    JEL: D01 D12 C91
    Date: 2013
  2. By: Livia Madureira (University of Tras-os-Montes e Alto Douro, Portugal); Jose Lima Santos (Instituto Superior de Agronomia, Technical University of Lisbon, Portugal); Ana Ferreira (University of Tras-os-Montes e Alto Douro, Portugal); Helena Guimarães (Algarve University, Portugal)
    Abstract: The present report develops and test and up an up-scaled non-market valuation framework to value changes in the provision level of the public goods and externalities (PGaE) of EU agriculture from the demand-side (i.e. using valuation surveys). The selected PGaE included in the study are the following: cultural landscape, farmland biodiversity, water quality and availability, air quality, soil quality, climate stability, resilience to fire and resilience to flooding. The evaluation framework has been based in "macro-regions" which can be defined as "multi-country areas with homogeneous agro-ecological infra-structures across EU". The following achievements have been accomplished along the project development: 1) comprehensive description of the study selected PGaE 2) Description of the selected agricultural PGaE using agri-environmental indicators, 3) contribution to a better and more standardised description of the agri-environmental public goods and externalities build on disentangling of the macro-regional agro-ecological infra-structures from its ecological and cultural services, 4) delimitation of wide areas with homogeneous agro-ecological infra-structures across EU, designated “macro-regions”, 5) delimitation of the macro-regions, independently from their supply of PGaE, disentangling the respective agro-ecological infra-structure from its ecological and cultural services, 6) definition of “Macro-Regional Agri-Environmental Problems” (MRAEP), through the association of the “macro-regions” with the core PGaE supplied by them, delivering non-market demand-side valuation problems relevant to the agricultural and agri-environmental policy decision-makers, 7) design of a Choice Modelling (CM) survey able to gather multi-country value estimates of changes in the provision level of different PGaE supplied by different EU broad regions (the macro-regions), 8) successful testing of the valuation framework through a pilot survey and 9) Delivering of alternative sampling plans for the EU level large-scale survey allowing for different options regarding the number of surveyed countries, the size and composition of respective samples, and the survey administration-mode, balanced with estimates for the corresponding budgetary cost.
    Keywords: Public Goods, Externalities, Agriculture, European Union, Choice Modelling, Evaluation
    Date: 2013–09
  3. By: Danyang Li (Experimental Economics Center and Department of Economics, Georgia State University); Zackary Hawley (Department of Economics, Texas Christian University); Kurt Schnier (Experimental Economics Center and Department of Economics, Georgia State University)
    Abstract: This research utilizes a laboratory experiment to evaluate the effectiveness of alternative public policies targeted at increasing the rate of deceased donor organ donation. The experiment includes treatments across different default choices and organ allocation rules inspired by the donor registration systems applied in different countries. Our results indicate that the opt-out with priority rule system generates the largest increase in organ donation relative to an opt-in only program. However, sizeable gains are achievable using either a priority rule or opt-out program separately, with the opt-out rule generating approximately 80% of the benefits achieved under a priority rule program.
    Keywords: Health, Organ Donation, Laboratory Experiment, Government Policy, Public Health
    JEL: C91 I10 I18
    Date: 2013–03
  4. By: Lukasz Grzybowski (Telecom ParisTech, Department of Economics and Social Sciences, 46 rue Barrault, 75013 Paris, France); Frank Verboven (University of Leuven and CEPR (London), Naamsestraat 69, 3000 Leuven, Belgium)
    Abstract: We use rich survey data on 133,825 households from 27 EU countries during 2005-2011 to analyze substitution between fixed-line and mobile telecommunications services. We estimate a discrete choice model where households may choose between having mobile or fixed-line voice access only, or using both technologies at the same time. We obtain the following main findings. First, fixed-line and mobile connections are on average perceived as substitutes. But there is substantial heterogeneity across households and EU regions, with stronger substitution in Central and Eastern European countries. Second, there is strong complementarity between fixed-line and mobile connections that are offered by the fixed-line incumbent operator. This gives the incumbent a possibility to leverage its position in the fixed-line market into the mobile market. Third, fixed broadband technologies such as DSL and cable generate strong complementarities between fixed and mobile access, while mobile broadband strengthens substitution (at a smaller scale). The emergence of fixed broadband has thus been an important additional source through which incumbents leverage their strong position in the fixed-line network.
    Keywords: fixed-to-mobile substitution; incumbency advantage; broadband access
    JEL: L13 L43 L96
    Date: 2013–09
  5. By: Ralf Bergheim; Michael W.M. Roos
    Abstract: This paper focuses on information acquisition and individual decision making in ambiguous situations and presents a novel experimental design which may help to tackle open questions from a fresh perspective. Instead of giving subjects the choice between risky and ambiguous Ellsberg urns, we let them choose between a safe option and a risky lottery, whose risk is a priori unknown to subjects. By acquiring information about the probability distribution of the lottery’s payoffs, subjects can reduce or even eliminate the ambiguity and turn the decision situation into one of risk. Under the assumption that an ambiguity averse subject should reduce ambiguity within a decision process we predicted that these subjects would request more information. Moreover, we investigate whether the relation between attitudes towards risk and ambiguity is linked to intuitive and deliberate thinking. Based on a detailed analysis of subjects’ information acquisition and decision processes we do not find that those subjects showing ambiguity aversion in an urn experiment based on Halevy (2007) significantly reduce the ambiguity more than others. More intuitive subjects acquire less information and are more likely to avoid the risky lottery. Intuition seems to be negatively correlated with risk aversion, but not with ambiguity aversion. Moreover, we find a positive correlation between risk and ambiguity aversion.
    Keywords: Ambiguity aversion; risk aversion; uncertainty; experiment; decision making; binary system of thinking
    JEL: C91 D03 D81
    Date: 2013–09

This nep-dcm issue is ©2013 by Edoardo Marcucci. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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