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on Discrete Choice Models |
| By: | Daniel Engler (University of Kassel, Institute of Economics); Gunnar Gutsche (Paderborn University, Faculty of Business Administration and Economics; University of Kassel, Institute of Economics); Andreas Ziegler (University of Kassel, Institute of Economics) |
| Abstract: | Based on a randomized controlled trial, this paper compares individual investment decisions in pre-registered non-incentivized and incentivized choice experiments to examine hypothetical bias. Using data from a representative sample of over 2, 100 individual investors from Germany and France, our econometric analysis reveals that the willingness to pay for sustainable investments is not significantly higher in the non-incentivized setting than in the incentivized setting, which is contrary to predictions from previous studies. The results are robust to various explanations of hypothetical bias and experimental design choices. Individual characteristics tend to have similar estimated effects on the preference for sustainable investments in both experimental settings. The results of our experimental analysis provide insights into the reliability of previous stated choice experiments and guidance for future experiments in (sustainable) finance. Furthermore, our estimation results improve our understanding of individual investment decisions, which is crucial from a policy perspective since individual investors play an important role in financing the transition to a sustainable economy. |
| Keywords: | Sustainable investments, randomized controlled trial, investment choice experiments, hypothetical bias, willingness to pay |
| JEL: | C25 G11 G41 Q56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:mar:magkse:202515 |
| By: | Soheil Ghili; K. Sudhir; Nitish Jain; Ankur Garg |
| Abstract: | We build on theoretical results from the mechanism design literature to analyze empirical models of second-degree price discrimination (2PD). We show that for a random-coefficients discrete choice ("BLP") model to be suitable for studying 2PD, it must capture the covariance between two key random effects: (i) the "baseline" willingness to pay (affecting all product versions), and (ii) the perceived differentiation between versions. We then develop an experimental design that, among other features, identifies this covariance under common data constraints in 2PD environments. We implement this experiment in the field in collaboration with an international airline. Estimating the theoretically motivated empirical model on the experimental data, we demonstrate its applicability to 2PD decisions. We also show that test statistics from our design can enable qualitative inference on optimal 2PD policy even before estimating a demand model. Our methodology applies broadly across second-degree price discrimination settings. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.13426 |
| By: | Kevin Dano; Bo E. Honor\'e; Martin Weidner |
| Abstract: | This paper systematically analyzes and reviews identification strategies for binary choice logit models with fixed effects in panel and network data settings. We examine both static and dynamic models with general fixed-effect structures, including individual effects, time trends, and two-way or dyadic effects. A key challenge is the incidental parameter problem, which arises from the increasing number of fixed effects as the sample size grows. We explore two main strategies for eliminating nuisance parameters: conditional likelihood methods, which remove fixed effects by conditioning on sufficient statistics, and moment-based methods, which derive fixed-effect-free moment conditions. We demonstrate how these approaches apply to a variety of models, summarizing key findings from the literature while also presenting new examples and new results. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.11556 |
| By: | Fitzpatrick, Aoife Claire |
| Abstract: | In 2023, the transportation sector in Europe contributed 25% of CO2 emissions, with almost no reduction since 2010. Despite government policies promoting decarbonization, public adoption of electric vehicles (EVs) remains limited. This study, involving 5, 500 German participants from a pre-registered survey and experiment, identifies information frictions and mixed beliefs about EV sustainability as key barriers. Two treatments-highlighting EVs' environmental benefits and public policies-both increased participants' likelihood of choosing an EV, but only the environmental treatment raised willingness to pay more. The findings underscore the need for clear, accurate information to complement policy efforts, reducing disinformation and amplifying the impact of initiatives to meet climate goals. |
| Keywords: | Electric Vehicles, Consumer Behaviour, Behavioural Economics, GreenTransition |
| JEL: | D12 D91 G11 G18 G53 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:324654 |
| By: | Förster, Manuel (Center for Mathematical Economics, Bielefeld University); Närmann, Fynn Louis (Center for Mathematical Economics, Bielefeld University) |
| Abstract: | We study a dynamic game in which a monopolistic seller sequentially discloses information about a binary state to a consumer through priced experiments. The consumer privately observes a binary signal which influences her willingness to pay for information. We show that if buyer types favor different actions but their willingness to pay for a state-revealing test is sufficiently close, then the seller can commit to a sequence of priced experiments that extracts the entire surplus of both consumer types simultaneously. The optimal sequence of experiments is such that the high-valuation type assigns a higher probability to outcomes that trigger further information acquisition, thus creating a difference in expected costs. As a key element of the construction, we introduce an ‘encryption protocol’ under which the consumer faces a stopping problem. We then characterize situations in which the seller strictly benefits from a dynamic selling strategy when perfect price discrimination is not feasible. Finally, we illustrate our framework in the context of medical diagnostic testing, showing that a free test followed by a state-revealing test is often sufficient to improve revenue in comparison with a static approach. |
| Keywords: | Information design, dynamic mechanism, selling information, encryption, price discrimination |
| Date: | 2025–07–03 |
| URL: | https://d.repec.org/n?u=RePEc:bie:wpaper:749 |
| By: | Mononen, Lasse (Center for Mathematical Economics, Bielefeld University) |
| Abstract: | Complexity aversion is well-documented in choice under risk. One of the main behavioral effects of complexity aversion is the event-splitting effect. This captures the change in the value of a lottery from splitting a prize of the lottery into two separate prizes by halving the probability. We relax the independence axiom for the event-splitting effect. Under continuity assumptions, this characterizes a decision-maker that is either 1) an expected utility maximizer with an entropic cost of complexity or 2) a powerweighted expected utility maximizer that weights probabilities by a power function. Additionally, our model offers preference foundations for the logit random choice. |
| Date: | 2025–08–18 |
| URL: | https://d.repec.org/n?u=RePEc:bie:wpaper:748 |
| By: | Rode, Johannes; Römer, Daniel; Salzgeber, Johannes |
| Abstract: | Demand for electric vehicles is growing, both in Germany and around the world. Electric vehicles are also becoming more important for the German export market. In the first quarter of 2025, more than one in four cars exported from Germany was a battery-electric vehicle (BEV). On average, 82, 000 BEVs worth EUR 3.4 billion were exported each month. Germany now generates a higher export surplus with BEVs than with other cars. The value of exports of BEVs exceeds the value of imports by a factor of 5. Besides, electric vehicles offer increasingly greater climate benefits. According to the KfW Energy Transition Barometer, one third of the electricity used to charge EVs in Germany is now self-generated and green, a new record. Consumer concerns about electric vehicles are decreasing. Approaches to increase EV uptake include removing information deficits, providing incentives for time-optimised charging and improving the conditions for charging in multi-family homes. |
| Date: | 2025–08–05 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:156659 |
| By: | Balleer, Almut; Hirsch, Michael; Nöller, Marvin |
| Abstract: | We present evidence that air pollution negatively affects current well-being. To do so, we create a new dataset, matching particulate matter concentration at the exact day and location with individual-level survey responses about current life satisfaction. The panel structure of our data allows us to overcome several identification challenges in the literature. Additionally, we show how aggregation of air pollution across time and space mis-measures the relevant exposure. Our results further suggest that air pollution affects current well-being mostly through negative emotions like sadness or worry. We estimate the willingness to pay for clean air that refers to the direct, immediate effects of air pollution and can be mapped well to economic models. |
| Abstract: | Luftverschmutzung beeinflusst das aktuelle Wohlbefinden negativ. Wir zeigen dies anhand eines neuen Datensatzes, in dem wir die Feinstaubkonzentration an einem bestimmten Tag und Ort mit individuellen Umfrageantworten zur aktuellen Lebenszufriedenheit abgleichen. Dank der Panelstruktur unserer Daten können wir hierbei mehrere Identifikationsprobleme aus der Literatur überwinden. Wir zeigen zudem, wie die Aggregation von Luftverschmutzung über Zeit und Raum zu einer falschen Messung der relevanten Belastung führt. Unsere Ergebnisse deuten darauf hin, dass Luftverschmutzung das aktuelle Wohlbefinden vor allem durch negative Emotionen wie Traurigkeit oder Sorgen beeinflusst. Darüber hinaus schätzen wir die kurzfristige Zahlungsbereitschaft für saubere Luft, die gut in ökonomische Modelle überführt werden kann. |
| Keywords: | Subjective well-being, air pollution, willingness to pay, compensating variation |
| JEL: | H41 I31 Q53 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:324660 |
| By: | Zhang, Xin; Jing, Wang Jing; gen, Fan sheng; Feskens, Edith; Duan, Ming-Jie (Wageningen University & Research) |
| Abstract: | Promoting whole-grain consumption is crucial for fostering healthier diets and achieving sustainable food systems. However, whole grain consumption remains low in China, highlighting the necessity for effective governmental policy interventions. This study investigated the effects of information intervention and price subsidy on promoting whole-grain bread choices among Chinese consumers, using a controlled quasi-experiment in a real supermarket in urban Beijing. Three conditions—information intervention, price subsidy intervention, and control—were implemented in separate time slots over the course of eight days. The information intervention featured health messages from the 2022 Chinese dietary guidelines on whole grains, displayed next to whole-grain bread products. The price subsidy intervention provided a post-purchase cash rebate, reducing the price of high whole-grain content bread products to the lowest-priced bread of all bread products. A total of 364 participants’ choice records from shopping receipts were collected, consisting of 132 in the control group, 126 in the information intervention group, and 106 in the price intervention group. Compared to those in the control group, participants in the price subsidy intervention group have significantly increased choices of high whole-grain content bread (OR= 4.67, 95% CI 2.61-8.38), whereas the information intervention showed no significant effect on whole-grain bread choices (OR=0.95, 95% CI 0.58-1.56). The effects remained robust after adjusting for individual socio-demographic characteristics. Future policies to promote whole-grain consumption in China should go beyond only providing generic health information from dietary guidelines but incorporate fiscal measures such as price subsidies. |
| Date: | 2025–08–22 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:uay89_v1 |
| By: | Mononen, Lasse (Center for Mathematical Economics, Bielefeld University) |
| Abstract: | Models of choice under uncertainty study choice behavior when outcomes depend on the realized state of the world. The typical assumption is that utilities of outcomes do not depend on the realized state and are state independent. Without this simplifying assumption, it is difficult to separately identify utilities and beliefs. This paper provides novel general foundations for models with state dependent utilities: once we depart from expected utility, it is often possible to uniquely identify utilities and beliefs. Specifically, we show that with general models of non-expected utility under ambiguity we have complete identification of utilities and probabilities under full-dimensional uncertainty. Additionally, we offer novel axiomatizations for state dependent dual-self variational expected utility and dual-self expected utility. |
| Keywords: | State dependent utility, belief identification, ambiguity, multiple priors, dual-self expected utility |
| Date: | 2025–08–15 |
| URL: | https://d.repec.org/n?u=RePEc:bie:wpaper:738 |
| By: | Ahlback, Johan; Yeandle, Alexander |
| Abstract: | International donors have invested heavily in strengthening electoral administration in low-income democracies, aiming to reduce irregularities and build trust. However, we know little about whether these interventions actually improve public perceptions. Using a conjoint choice experiment in Malawi, randomising organisational features of polling stations and their potential for political bias, we examine the determinants of public trust in a low-income setting. Voters are more trusting of stations with well-trained polling staff, independent monitors, security personnel, and transparency measures, effects driven by sanctioning the absence of these basic requirements. Respondents also prioritise procedurally fair measures over those that exclusively benefit their own party or ethnic group, challenging assumptions about the dominance of partisanship and ethnicity in African elections. We contribute to the literature on election administration and public opinion in low-income settings, while highlighting ways in which resource-constrained election bodies can build and maintain public support. |
| Date: | 2025–08–20 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:xhuz5_v1 |
| By: | Xun Lu; Liangjun Su |
| Abstract: | We consider a correlated random coefficient panel data model with two-way fixed effects and interactive fixed effects in a fixed T framework. We propose a two-way mean group (TW-MG) estimator for the expected value of the slope coefficient and propose a leave-one-out jackknife method for valid inference. We also consider a pooled estimator and provide a Hausman-type test for poolability. Simulations demonstrate the excellent performance of our estimators and inference methods in finite samples. We apply our new methods to two datasets to examine the relationship between health-care expenditure and income, and estimate a production function. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.10302 |
| By: | Athanasios Andrikopoulos; Nikolaos Sampanis |
| Abstract: | The theory of optimal choice sets offers a well-established solution framework in social choice and game theory. In social choice theory, decision-making is typically modeled as a maximization problem. However, when preferences are cyclic -- as can occur in economic processes -- the set of maximal elements may be empty, raising the key question of what should be considered a valid choice. To address this issue, several approaches -- collectively known as general solution theories -- have been proposed for constructing non-empty choice sets. Among the most prominent in the context of a finite set of alternatives are the Stable Set (also known as the Von Neumann-Morgenstern set) and its extensions, such as the Extended Stable Set, the socially stable set, and the $m$-, and $w$-stable sets. In this paper, we extend the classical concept of the stable set and its major variants - specifically, the extended stable set, the socially stable set, and the $m$- and $w$-stable sets - within the framework of irreflexive binary relations over infinite sets of alternatives. Additionally, we provide a topological characterization for the existence of such general solutions. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.09798 |