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on Discrete Choice Models |
| By: | Akinwehinmi, Titilayo; Birgit, Gassler; Ramona, Teuber |
| Abstract: | Consumer resistance to novel food technologies, such as genetic modification (GM) and gene editing (GED), is often attributed to a limited understanding of the underlying scientific processes. Literature suggests that providing information about the processes may influence consumer acceptance, but evidence remains inconsistent across regions. This study examines how information on genetic engineering processes influences consumer willingness to pay (WTP) for genetically engineered foods in Sub-Saharan Africa (SSA), where food and nutrition insecurity are pressing issues. Using a discrete choice experiment (DCE) conducted in Nigeria and a randomized experimental design, we subjected respondents to two types of information treatments: one emphasizing the health benefits of a nutritionally enhanced cassava product ("gari") and another that additionally explained the scientific processes behind conventional breeding, GM, GED. The data were analyzed using mixed logit models, comparing full attendance with stated and inferred attribute non-attendance (ANA) specifications. The results show consumers are willing to pay a premium for enhanced micronutrient content. However, information detailing scientific processes increased consumer aversion toward GM and GED methods. Importantly, providing process information significantly reduced instances of ANA behaviour, with stated ANA models offering the best fit to the data. While our findings suggest that efforts to scale up these technologies to address micronutrient deficiency and other nutrition insecurities in Africa are likely to succeed, other concerns about market prospects remain. We discuss these concerns and other market implications of the findings. |
| Keywords: | Food Consumption/Nutrition/Food Safety |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:360897 |
| By: | Gurung, Suraj; Chen, Lijun Angelia; Magnier, Alexandre; Gao, Zhifeng |
| Abstract: | The rise of the Home Cooking Movement (HCM) reflects growing consumer interest in locally sourced, value-added foods and a desire for closer ties to food origins. Legislative reforms in states like California, Utah, Iowa, and Wyoming have introduced varied regulatory frameworks—from strict licensing to full exemptions— which may influence consumer trust and behavior towards home kitchens. To examine how these regulatory differences and consumer values shape willingness to pay (WTP) and purchasing decisions, we designed a discrete choice experiment (DCE) with five key attributes: price, customer reviews, establishment type (licensed/exempt home kitchens or traditional restaurants), liability insurance, and certifications. Using a betweensubjects design, respondents were randomly assigned to one of three information treatments: control, altruistic, or egoistic. A random parameter logit (RPL) model was used to capture preference heterogeneity. Results show strong, consistent WTP for food safety credentials ($3.60–$5.95). However, framing plays a critical role: egoistically framed consumers required steep discounts to choose either licensed (−$3.46) or exempt (−$3.82) home kitchens, whereas altruistic messaging significantly reduced resistance and broadened acceptance. These findings highlight the importance of value-aligned messaging and credible food safety practices in fostering consumer acceptance of home kitchens. |
| Keywords: | Consumer/Household Economics |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:360599 |
| By: | Akinwehinmi, Oluwagbenga; Liesbeth, Colen; Vincenzina, Caputo |
| Abstract: | Aflatoxin contamination in food poses severe health risks in many low- and middle-income countries (LMICs), yet many consumers are unaware of their exposure. Moreover, most food markets in these countries are not regulated for food safety and lack credible mechanisms to signal food safety. This study investigates how market-specific exposure information influences consumers' beliefs about their perceived health risk of and exposure to aflatoxin contamination, and willingness to pay (WTP) for tested, certified, and untested maize flour. Based on test results from 150 maize flour samples taken at five informal markets, we generated market-specific exposure to aflatoxin contamination. Using an incentive-compatible discrete choice experiment (DCE) with a random information treatment, we estimated WTP among 370 consumers in Northern Nigeria. The findings reveal that tailored, market-specific information resulted in the most significant updates of belief about exposure to unsafe food, large premiums for tested and certified maize flour, and the largest discount for untested maize flour. Heterogeneity analysis shows that belief updating significantly explains the discount. Findings underscore the potential of market-specific information to mitigate consumer exposure to food safety risks, promote safer food markets, and inform food safety policies in LMICs. |
| Keywords: | Food Security and Poverty |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:360883 |
| By: | Peterson-Wilhelm, Bailey; Schwab, Benjamin; Burrone, Sara |
| Abstract: | List experiments utilize indirect survey questions to reduce social desirability bias in measures of sensitive behaviors and sentiments. While often used to assess retrospective behavior or opinions of respondents, list experiments have not been widely applied to assessing “deep” parameters of economic models, such as willingness to pay. Common stated preference methods of estimating willingness to pay may be impacted by social desirability bias, particularly when a product has been provided to survey recipients for free. List experiments can uncover the share of respondents willing to pay a given price while reducing social desirability bias. Repeating the method at a variety of prices recovers a partial demand curve. This study discusses the conditions required to satisfy the list experiment validity assumptions and demonstrates the method in an e-extension platform randomized control trial in Sri Lanka. We show that the “no design effect” assumption for list experiments requires that the budget constraint for a household be nonbinding. Under conditions where that assumption is likely to hold, we find direct estimates overstate willingness to pay at low prices. Our findings suggest list experiments may provide a cheap method of more accurately assessing the typically large share of respondents unwilling to pay any non-zero-sum (extensive margin), but are less effective at reducing bias from exaggerated demand (intensive margin). |
| Keywords: | Food Security and Poverty |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:361169 |
| By: | Brown, Zachary; Dickinson, Katherine L.; Paskewitz, Susan |
| Abstract: | Serial nonparticipation in nonmarket valuation using choice data is a frequently observed pattern of behavior in which an individual always appears to choose the status quo or ‘no program’ alternative. In choice models serial nonparticipation may be viewed as belonging to a class of deterministic choice patterns, other examples of which include serial participation and lexicographic preferences. While common in the context of environmental goods unfamiliar to respondents, logit-based choice models are ill-equipped for identifying such preferences, because predicted choice probabilities cannot take a value of zero or one. We extend latent class analysis (LCA) of preference heterogeneity to address this issue, for each class specifying a subset of alternatives that are avoided with certainty. We are then able to partially observe class membership, knowing with certainty that an individual does not belong to a class if she selects any alternatives excluded by that class. We apply our model to a discrete choice experiment on mosquito control programs to reduce West Nile virus risk and nuisance disamenities in Madison, Wisconsin. We find that partially observable latent class analysis (POLCA) obtains the same goodness of fit as LCA with fewer parameters. Adjusting for the need to re-specify the reference alternative when the status quo is excluded, our relative valuation measures are significantly different than those obtained from LCA. We argue that our model is useful for detecting and addressing alternative-specific nonidentification in a given dataset, thus reducing the risk of invalid inference from discrete choice data. |
| Keywords: | Environmental Economics and Policy |
| URL: | https://d.repec.org/n?u=RePEc:ags:cenrep:264979 |
| By: | Christina Timko; Maja Adena (WZB Berlin & TU Berlin) |
| Abstract: | Behavioral design in smartphone apps aims at inducing certain, monetizable behavior, mainly increased engagement, measurable by usage time. Such design is rarely transparent and often restricts users’ ability to make alternative choices. In a framed field experiment, we document that behavioral design doubles app usage time compared to a version without behavioral elements. Providing users with choices—simply explained and conveniently adjustable design features—reduces usage time and increases their willingness to pay for the app. These findings suggest that offering choice could pave the way for new business models based on more responsible app design. |
| Keywords: | smartphone app; behavioral control; filtering algorithm; transparency and choice; self-determination; corporate social responsibility; field experiment; |
| JEL: | C93 O33 D83 L86 M14 |
| Date: | 2026–01–03 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:559 |
| By: | Deka, Anubrata; Meerza, Syed Imran Ali; Yiannaka, Amalia |
| Abstract: | We assess consumer preferences and attitudes toward CRISPR applications and estimate consumer willingness to pay for a food product developed using CRISPR technology to enhance food safety and confer health benefits. Within this context, we analyze the impact of information provision on perceptions, attitudes and willingness to pay for gene-edited wheat flour with reduced acrylamide levels. Specifically, we consider the potential effect of both the nature of information provided (whether it emphasizes the differences between GM and CRISPR technology or not) and the delivery format (text versus video) used to present content-equivalent information. Among the factors we investigate as potentially influencing consumer preferences and WTP are consumers’subjective and objective knowledge of CRISPR technology, its perceived benefits and risks as well as trust in various entities to accurately inform and develop safe and beneficial gene editing agri-food technologies. Our results show that although consumers were willing to pay a positive amount for CRISPR gene-editing technology, their willingness to pay was lower compared to what they were willing to pay for the organic and conventional technology. Results also show that WTP for CRISPR gene-editing technology and reduced acrylamide levels were highest for participants with high subjective and objective knowledge. In contrast, variations in informational content and delivery modality do not have a statistically significant effect on consumer valuation of CRISPR gene-edited wheat flour. |
| Keywords: | Consumer/Household Economics |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:360601 |
| By: | Pemberton, Carlisle A.; Mader-Charles, Kathleen |
| Abstract: | The Nariva Swamp is the largest wetland in the eastern Caribbean, and is situated along the eastern coast of Trinidad. It is the habitat of a diverse array of plants and animals including the Anaconda (Eunectes murinus) and the endangered Manatee (Trichechus manatus). Several human communities surround Nariva Swamp. These activities, from agriculture to the clandestine cultivation of illegal crops have caused the Nariva Swamp to have experienced tremendous changes to its ecology and hydrology. Several studies have been conducted to estimate the WTP of the population of Trinidad and Tobago to conserve the Nariva Swamp. However the factors determining the WTP of the population remain largely unexplained. This study was therefore conducted in an effort to understand the factors that would contribute to the willingness to pay for the conservation of the swamp, and to add to the body of knowledge that exists on the subject of WTP for conservation in developing countries. An open-ended bid question on the maximum WTP was presented to a representative sample of households in Trinidad and responses regressed against ten independent household and choice variables. The results showed that only three choice attributes variables were significant in determining WTP. These were variables scoring the importance of future, bequest and existence values. |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, International Development |
| URL: | https://d.repec.org/n?u=RePEc:ags:carc04:265616 |
| By: | Arcidiacono, Peter (Duke University); Gyetvai, Attila (Banco de Portugal); Maurel, Arnaud (Duke University); Jardim, Ekaterina (Amazon) |
| Abstract: | This paper applies some of the key insights of dynamic discrete choice models to continuous-time job search models. Our framework incorporates preference shocks into search models, resulting in a tight connection between value functions and conditional choice probabilities. In this environment, we establish constructive identification of the model parameters, including the wage offer distributions off- and on-the-job. Our framework makes it possible to estimate nonstationary search models in a simple and tractable way, without having to solve any differential equations. We apply our method using Hungarian administrative data. Longer unemployment durations are associated with lower offer arrival rates, resulting in accepted wages falling over time. Counterfactual simulations indicate that increasing unemployment benefits by 90 days results in a 14-day increase in expected unemployment duration. |
| Keywords: | dynamic discrete choice, identification, job search |
| JEL: | J64 C31 C41 J31 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18309 |
| By: | Belzil, Christian (Ecole Polytechnique, Paris); Jagelka, Tomáš (University of Bonn) |
| Abstract: | We develop a micro-founded framework to account for individuals' effort and cognitive noise which confound estimates of preferences based on observed behavior. Using a large-scale experimental dataset we find that observed decision noise responds to the costs and benefits of exerting effort on individual choice tasks as predicted by our model. We estimate that failure to properly account for decision errors due to (rational) inattention on a more complex, but commonly used, task design biases estimates of risk aversion by 50% for the median individual. Effort propensities recovered from preference elicitation tasks generalize to other settings and predict performance on an OECD-sponsored achievement test used to make international comparisons. Furthermore, accounting for endogenous effort allows us to empirically reconcile competing models of discrete choice. |
| Keywords: | cognitive noise, endogenous effort, stochastic choice models, latent attributes, economic preferences, complexity, experimental design, achievement tests |
| JEL: | D91 C40 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18315 |
| By: | Tobias-Mamina, Rejoice; Jordaan, Yolanda; Lin, Lin; Ortega, David L. |
| Abstract: | High meat consumption in South Africa is driven by population growth, increased income, and urbanization. However, high meat production raises environmental and societal concerns, highlighting the need to shift toward more sustainable protein sources to reduce these impacts. This study examines consumer preferences for plant-based, insect-based, and cultured meat as alternatives, alongside the effects of environmental and health information and naming restrictions on these preferences. A food choice experiment was administered on 1, 013 urban South African food shoppers to assess preferences for three alternative burger patties relative to farm-raised beef patties. Respondents were randomly assigned to treatments varying by health, environmental, and product naming information. Results indicate that farm-raised beef captures approximately 96% of the market share within our sample of urban food shoppers. Naming restrictions do not significantly affect beef demand but increase the market share for plant-based and cultured alternatives. Health information leads to slightly higher preferences for plant-based options than environmental information. Preference for insect-based alternatives remains low, likely due to an aversion to insects. These findings enhance understanding of consumer preferences for alternative meat products and naming restrictions, informing policies aimed at reducing the environmental and societal impacts of livestock production in South Africa. |
| Keywords: | Marketing |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:360835 |
| By: | Meerza, Syed Imran Ali; Mottaleb, Khondoker; Dsouza, Alwin |
| Abstract: | Zinc rice has the potential to address zinc deficiency, particularly among vulnerable populations like women of reproductive age and children, as zinc deficiency can lead to impaired growth, compromised immune function, and various other health issues. However, ensuring sufficient consumer acceptance and market adoption of zinc rice is crucial for maximizing its positive public health impact. This study investigates the effects of sequential information framing – whether positive information is provided first or negative information comes first – and recency bias on consumer valuations of zinc rice using a non-hypothetical laboratory experiment involving 400 participants. Our findings indicate that the sequence of information presented significantly affects consumers' willingness to pay (WTP) for zinc rice. Specifically, initial positive information results in higher valuations; however, the subsequent negative information neutralizes these positive effects. Interestingly, when consumers are first exposed to negative information followed by positive details, their valuations of zinc rice increase significantly. Notably, the recency bias plays an important role, as the last piece of information presented has a stronger effect on consumer valuation. The results suggest that marketing and informational campaign strategies should emphasize potential risks, followed by health benefits, to enhance consumer demand for zinc rice. |
| Keywords: | Consumer/Household Economics |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:360597 |
| By: | Gustafson, Christopher R. |
| Abstract: | We conducted an experiment on the choice of plant-based vs. animal-source frozen patties and burgers in a complex (50 unique products) choice environment. We examined the impact of two variations in the choice environment on the choice of plant-based vs. animal-source burgers: the prevalence of plant-burgers (20% vs. 30%) and the presence (or not) of a filter enabling participants to easily find pulse-based burger products. Further, we examined individual-specific drivers of choice outcomes, and we introduced a novel application of ecological momentary assessment (EMA) to identify choice outcomes that participants were actively (cognitively) modelling during the choice process in terms of the product alternatives in the choice environment. These outcomes included taste, cost, health, environment, among others. We examined the impact of these EMA variables alongside more traditional measures of consumer priorities, beliefs, and habits. We find a small percentage of plant-based choices in conditions without the filter (approximately 10%), with no meaningful difference between the low and high prevalence conditions. The proportion of plant-based choices more closely resemble retail data than outcomes of recent choice experiments, which predict plant-based choices to be around 30%. However, when the filter is present, the proportion of plant-based choices is approximately 30%. We find evidence that EMA can be a useful tool to understand consumer cognition during choice. Participants actively considering health or the environment were significantly more likely to choose plant-based options, while individuals reporting active consideration of taste or price were significantly more likely to choose meat-based alternatives. |
| Keywords: | Consumer/Household Economics |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:361146 |
| By: | Shawn Berry |
| Abstract: | Consumer regret is a widespread post-purchase emotion that significantly impacts satisfaction, product returns, complaint behavior, and customer loyalty. Despite its prevalence, there is a limited understanding of why certain consumers experience regret more frequently as a chronic aspect of their engagement in the marketplace. This study explores the antecedents of consumer regret frequency by integrating decision agency, status signaling motivations, and online shopping preferences into a cohesive framework. By analyzing survey data (n=338), we assess whether consumers' perceived agency and decision-making orientation correlate with the frequency of regret, and whether tendencies towards status-related consumption and preferences for online shopping environments exacerbate regret through mechanisms such as increased social comparison, expanded choice sets, and continuous exposure to alternative offers. The findings reveal that regret frequency is significantly linked to individual differences in decision-related orientations and status signaling, with a preference for online shopping further contributing to regret-prone consumption behaviors. These results extend the scope of regret and cognitive dissonance research beyond isolated decision episodes by emphasizing regret frequency as a persistent consumer outcome. From a managerial standpoint, the findings suggest that retailers can alleviate regret-driven dissatisfaction by enhancing decision support, minimizing choice overload, and developing post-purchase reassurance strategies tailored to segments prone to regret.. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.24862 |
| By: | Hongshen Sun; Juanjuan Zhang |
| Abstract: | Large language models (LLMs) are increasingly used to simulate human behavior, but common practices to use LLM-generated data are inefficient. Treating an LLM's output ("model choice") as a single data point underutilizes the information inherent to the probabilistic nature of LLMs. This paper introduces and formalizes "model belief, " a measure derived from an LLM's token-level probabilities that captures the model's belief distribution over choice alternatives in a single generation run. The authors prove that model belief is asymptotically equivalent to the mean of model choices (a non-trivial property) but forms a more statistically efficient estimator, with lower variance and a faster convergence rate. Analogous properties are shown to hold for smooth functions of model belief and model choice often used in downstream applications. The authors demonstrate the performance of model belief through a demand estimation study, where an LLM simulates consumer responses to different prices. In practical settings with limited numbers of runs, model belief explains and predicts ground-truth model choice better than model choice itself, and reduces the computation needed to reach sufficiently accurate estimates by roughly a factor of 20. The findings support using model belief as the default measure to extract more information from LLM-generated data. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.23184 |
| By: | Duan, Dinglin; Gao, Zhifeng |
| Abstract: | While Nutrition Facts Panels (NFPs) are mandated by the FDA for packaged foods in physical retail, their regulation in online environments remains unaddressed. This study examines how NFP accessibility affects consumer purchase decisions in online grocery shopping, where NFP presentation is inconsistent and often absent. Despite online grocery sales reaching $201 billion in 2023, no research has investigated the relationship between NFP accessibility and consumer choices in digital grocery stores. Using a real choice experiment, participants make actual purchase decisions while we manipulate NFP presence and placement. The study addresses three research questions: (1) whether NFPs should be mandated for online food retail, (2) whether NFP prominence affects consumer decisions, and (3) whether simplified nutrition indicators enhance online shopping choices. This investigation is particularly timely given the FDA's January 2025 proposal for front-of-package nutrition labeling, which emphasizes immediate visibility of key nutritional information but has unknown implications for consumer behavior. Our research design differs from previous studies by testing actual purchase behavior rather than stated preferences, evaluating various NFP placements, and examining simplified nutrition formats. Results will inform policymakers in developing regulations for online food retail and help retailers design effective strategies for presenting nutritional information. The findings are especially relevant as online grocery shopping continues to expand, making digital nutrition labeling an increasingly important public health concern. |
| Keywords: | Food Security and Poverty |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:360871 |
| By: | Shusaku Sasaki; Takunori Ishihara; Hirofumi Kurokawa |
| Abstract: | Why are interventions with weak evidence still adopted? We study charitable incentives for physical activity in Japan using three linked methods, including a randomized field experiment (N=808), a stakeholder belief survey (local government officials and private-sector employees, N=2, 400), and a conjoint experiment on policy choice. Financial incentives increase daily steps by about 1, 000, whereas charitable incentives deliver a precisely estimated null. Nonetheless, stakeholders greatly overpredict charitable incentives' effects on walking, participation, and prosociality. Conjoint choices show policymakers value step gains as well as other outcomes, shaping policy choice. Adoption thus reflects multidimensional beliefs and objectives, highlighting policy selection as a scaling challenge. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.24852 |
| By: | Gatti, Nicolas |
| Keywords: | Production Economics |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea24:343759 |
| By: | Nobuyuki Hanaki; Bolin Mao; Tiffany Tsz Kwan Tse; Wenxin Zhou |
| Abstract: | This study investigates participants’ willingness to pay for stock forecasting advice from algorithms, financial experts, and peers. Contrary to prior findings on “algorithm aversion, ” participants valued algorithmic advice as much as expert advice and relied on it heavily, even though its performance was not superior. This algorithm appreciation reflects a shift in perceived reliability among students. However, it led to lower payoffs, as participants overpaid for advice that failed to significantly improve outcomes. These findings highlight the importance of developing tools and policies that help individuals better evaluate the actual value of algorithmic advice. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:dpr:wpaper:1268r |
| By: | Melo, Grace; Palma, Marco; Chomali, Laura; Ribera, Luis |
| Abstract: | Being able to accurately predict the marketing effectiveness of product labels is critical for business profitability. Do industry experts (e.g., domain-specific and domain-general marketers) understand and accurately predict which messages appeal most to consumers? There is limited knowledge in this area, specifically around two essential food attributes: health and taste. Consumers perceive health and taste as trade-offs, which makes their reaction to such marketing information challenging to forecast. This study is the first to quantify the extent to which domain-general vs domain-specific experts can accurately predict consumer responses to health and taste information via marketing labels. We conducted three incentivized studies: Study 1 investigated consumer preferences for simple health versus taste labeling messages with actual consumers. Study 2 uncovered industry domain-specific ‘industry experts’ predictions for average consumers’ willingness-to-pay (WTP) for the messages providing incentives for accuracy. Study 3 employs domain-general ‘marketing experts’ (cross-industry) and evaluates the role of market intelligence in improving consumer valuation forecasts. We found that while both expert types made optimistic predictions that marketing health-related information would effectively increase consumer valuations, consumers did not respond to such information. Moreover, despite exhibiting greater confidence in their predictions than domain-general experts (63% vs 70%), domain-specific industry experts overestimated consumer valuations by 33% relative to the average consumer WTP of $6.80 for an 8 oz. bag of pecans. In contrast, domain-general experts overestimated consumer valuations by only 5%, suggesting possible motivated reasoning among industry-specific experts. Releasing market intelligence to domain-general experts for the baseline valuation (control) improved the accuracy of the forecast for the control, but forecasting inaccuracies for specific labeling messages prevailed. |
| Keywords: | Institutional and Behavioral Economics |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:360812 |
| By: | Youichiro Higashi; Kemal Ozbek; Norio Takeoka |
| Abstract: | In this paper, we study axiomatic foundations of Bayesian persuasion, where a principal (i.e., sender) delegates the task of choice making after informing a biased agent (i.e., receiver) about the payoff relevant uncertain state (see, e.g., Kamenica and Gentzkow (2011)). Our characterizations involve novel models of Bayesian persuasion, where the principal can steer the agent's bias after acquiring costly information. Importantly, we provide an elicitation method using only observable menu-choice data of the principal, which shows how to construct the principal's subjective costs of acquiring information even when he anticipates managing the agent's bias. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.23409 |
| By: | Umutcan Salman |
| Abstract: | I develop a revealed preference framework to test whether an aggregate allocation of indivisible objects satisfies Pareto efficiency and individual rationality (PI) without observing individual preferences. Exploiting the type-based preferences of Echenique et. al. (2013), I derive necessary and sufficient conditions for PI-rationalizability. I show that an allocation is PI-rationalizable if and only if its allocation graph is acyclic. Next, I analyse non-PI-rationalizable allocations. First, I study the three respective problems: removal of a minimum size of subset of individuals/types/objects to restore PI-rationalizability. I prove that these three problems are NP-complete. Then, I provide an alternative goodness-of-fit measure, namely Critical Exchange Index (CEI). The CEI assess the highest portion of individuals who can involve exchanging their final objects to reach PI. This measure shows the extent of inefficiencies. The results yield the first complete revealed preference analysis for Pareto efficiency and individual rationality in matching markets and provide an implementable tool for empirical applications. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.23352 |
| By: | Baek, Tae Hyun; Yim, Mark Yi-Cheon; Park, Jooyoung; Cho, Areum |
| Abstract: | Marketers are increasingly using unconventional design tactics to visually disrupt consumer expectations, like turning brand logos upside down. Across four experiments, this research examined how inverted logos influence consumer brand responses. In two binary choice tasks (Studies 1A and 1B), participants exhibited a lower preference for an inverted logo than a standard logo for branded products. Study 2 determined the psychological mechanism underlying this effect: inverted logos increase perceived unexpectedness, which increases perceptions of brand rebelliousness and, ultimately, reduces purchase intentions. Study 3 demonstrated that political ideology moderates this effect: more conservative, but not liberal, consumers respond negatively to inverted logos. Finally, we discussed the theoretical and practical implications for logo design and visual branding strategies. |
| Keywords: | logo orientation; perceived unexpectedness; perceived rebelliousness; political ideology; schema congruity; AAM requested |
| JEL: | L81 |
| Date: | 2026–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129521 |
| By: | Mauricio Ribeiro |
| Abstract: | Economists often rely on people’s choices to infer their preferences. However, inferring preferences from choices becomes problematic when people face unobserved constraints. In this paper, I study how to (cautiously) infer preferences from choices when the choices of the members of a social group are subject to a constraint that we only imperfectly know. When this happens, heterogeneity in the group’s choices, along with more information about the constraint, helps recover the preferences of group members, whereas homogeneity in choices hinders it. I further argue that standard approaches to choice-based welfare analysis can lead to misleading inferences about welfare when there are unobserved social constraints. |
| Date: | 2025–04–02 |
| URL: | https://d.repec.org/n?u=RePEc:bri:uobdis:25/809 |
| By: | Nicolas Ajzenman (McGill University); Martín Ardanaz (Inter-American Development Bank); Guillermo Cruces (Universidad de San Andrés-CONICET, University of Nottingham); Germán Feierherd (Universidad de San Andrés); Ignacio Lunghi (New York University & CEDLAS-IIE-UNLP) |
| Abstract: | Corruption—and the widespread perception of it—poses significant obstacles to development by eroding institutional trust and reducing citizens’ willingness to pay taxes. Yet, government efforts to improve public perceptions by combating corruption may prove ineffective—or even backfire—when confronted with entrenched pessimistic beliefs. We propose that providing an external benchmark of corruption to shift the reference point before highlighting government actions can mitigate these negative effects. In a survey experiment exploiting an institutional reform within Honduras’ tax agency, we find that messages focusing solely on reform efforts have limited or negative effects. By contrast, a combined message that first corrects pessimistic beliefs and then highlights anti-corruption efforts significantly reduces perceived corruption and tax evasion intentions. A field experiment with approximately 45, 000 taxpayers confirms that this sequencing approach increases actual tax compliance. These findings suggest that belief updating is possible—but only when information is structured to first engage and recalibrate skeptical priors. |
| Keywords: | Corruption, Tax Administration, Tax Evasion, Field Experiment |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:sad:wpaper:173 |