nep-exp New Economics Papers
on Experimental Economics
Issue of 2016‒06‒14
twenty-two papers chosen by

  1. Does Credit Access Improve Firm Output? Evidence from a Field Experiment in Bangladesh By Jimi, Nusrat A; Kumbhakar, Subal; Nikolov, Plamen V; Malek, Mohammad Abdul
  2. The effects of allowing substitutes on bidding behavior in a private value experimental auction By Lee, Ji Yong; Fox, John A.
  3. Information, Financial Aid and Training Participation: Evidence from a Randomized Field Experiment By Görlitz, Katja; Tamm, Marcus
  4. Heterogeneous Motives in the Trust Game: A Tale of Two Roles By Espín, Antonio M.; Exadaktylos, Filippos; Neyse, Levent
  5. Price Dynamics and Consumption Smoothing in Experimental Asset Markets By Halim, Edward; Riyanto, Yohanes Eko; Roy, Nilanjan
  6. Band or Point Inflation Targeting? An Experimental Approach By Camille Cornand; Cheick Kader M'baye
  7. When Can Experimental Evidence Mislead? A Re-Assessment of Canada's Self Sufficiency Project By Riddell, Chris; Riddell, W. Craig
  8. What is the Causal Impact of Knowledge on Preferences in Stated Preference Studies? By Nick Hanley; Mikolaj Czajkowski
  9. Cutthroats or comrades: Information sharing among competing fund managers By Ganglmair, Bernhard; Holcomb, Alex; Myung, Noah
  10. Did you really get the message? Using text reminders to stimulate adoption of agricultural technologies By Larochelle, Catherine; Alwang, Jeffrey; Travis, Elli
  11. Value of parsimonious nutritional information in a framed field experiment By Jo, Jisung; Lusk, Jayson; Muller, Laurent; Ruffieux, Bernard
  12. Choice or information overload ? By Fabrice Le Lec; Marianne Lumeau; Benoît Tarroux
  13. Behavioral interventions in tax compliance : evidence from Guatemala By Kettle,Stewart; Hernandez,Marco; Ruda,Simon; Sanders,Michael
  14. Synchronization in human decision making By Yi-Fang Liu; Jørgen Vitting Andersen; Maxime Frolov; Philippe de Peretti
  15. Ellsberg Re-revisited: An Experiment Disentangling Model Uncertainty and Risk Aversion By Loic Berger; Valentina Bosetti
  16. Incentives in Experiments with Objective Lotteries By Paul J. Healy; Yaron Azrieli; Christopher P. Chambers
  17. How Information Affects Consumer Acceptance of Nano-packaged Food Products By Zhao, Shuoli; Yue, Chengyan; Wang, Yumeng
  18. Single versus Multiple Randomization in Matching Mechanisms By André Schmelzer
  19. Blue or Red? How Color Affects Consumer Information Processing in Food Choice By Shen, Meng; Gao, Zhifeng
  20. Allais for the poor By Herrmann, Tabea; Hübler, Olaf; Menkhoff, Lukas; Schmidt, Ulrich
  21. Asymmetric Effects of Winning and Losing Experience in Multi-Unit Auctions By Elskamp, Rebecca
  22. Valuing Natural Resources Allocated by Dynamic Lottery By Reeling, Carson; Verdier, Valentin; Lupi, Frank

  1. By: Jimi, Nusrat A; Kumbhakar, Subal; Nikolov, Plamen V; Malek, Mohammad Abdul
    Abstract: Abstract: Poor financial environment of rural developing economy leads to underinvestment and inefficiency of marginal and small-scale farm households. Development interventions for providing improved market access and credit at subsidized interest rate to small farm households are therefore considered as the preconditions in the transformation process of rural agrarian economy. Hence, the question of whether access to resources influences farm households’ production decisions, performance and efficiency is very important. In this paper, we attempt to estimate the impact of a subsidized credit on farm output and efficiency of small and marginal rice farmers of Bangladesh. Using survey data of a field experimental study, we show that relaxing the credit constraint has significant positive impact on farm output and efficiency. On an average, small-scale rice farms with access to subsidized credit are found to be 13% more efficient than farms with no credit access. The increase is 76% on average when we use the randomized access to credit as instrument for farm credit. We also examine the impact heterogeneity of access to credit by rice variety. We find that cultivation of modern Hybrid rice variety is significantly higher (on average 17%) for treatment farm households compare to the control group. However, we do not find much evidence of heterogeneous productivity impact of access to credit by HYV vs. Hybrid rice. Combining the results, we conclude that access to credit is effective in improving the overall output and efficiency of marginal and small-scale rice farm households. Thus, policies enhancing the credit access of marginal farmers are important for sustainable agricultural development of rural developing economy.
    Keywords: Randomize Control Trial, Credit, Small Farm, Efficiency, Community/Rural/Urban Development, Production Economics, Productivity Analysis, O13, Q14, E51,
    Date: 2016–05
  2. By: Lee, Ji Yong; Fox, John A.
    Abstract: Objectives of this study were to investigate the effect of the availability of substitutes on participants’ bidding behaviors in a private value experimental auction, and to identify whether the availability of additional substitutes decrease the value of product information, and mitigate the effect of new information on product valuations. We created the unique experimental design to examine three research objectives. Our results showed that allowing substitutes in a privately valued auction did not significantly affect subjects’ bidding behaviors while it decreased value and effect of product information.
    Keywords: Substitutes, Experimental auction, Value of information, Information effect, Consumer/Household Economics, Institutional and Behavioral Economics,
    Date: 2016
  3. By: Görlitz, Katja (Free University of Berlin); Tamm, Marcus (RWI)
    Abstract: To increase employee participation in training activities, the German government introduced a large-scale training voucher program in 2008 that reduces training fees by half. Based on a randomized field experiment, this paper analyzes whether providing information about the existence and the conditions of the training voucher had an effect on actual training activities of employees. Because the voucher was newly introduced, only one-fourth of the eligible employees knew the voucher exists at the time of the experiment. The information intervention informed a random sample of eligible employees by telephone about the program details and conditions. The results indicate that the information significantly increased treated individuals' knowledge of the program but had no effect on voucher take-up or participation in training activities. Additional descriptive analyses suggest that the reasons for these zero effects are that the demand for self-financed training is low and that liquidity constraints do not discourage many employees from training participation.
    Keywords: training participation, voucher, financial aid, randomized field experiment, information treatment
    JEL: I22 D83 H52
    Date: 2016–04
  4. By: Espín, Antonio M.; Exadaktylos, Filippos; Neyse, Levent
    Abstract: Trustful and trustworthy behaviors have important externalities for the society. But what exactly drives people to behave in a trustful and trustworthy manner? Building on research suggesting that individuals’ social preferences might be a common factor informing both behaviors, we study the impact of a set of different motives on individuals’ choices in a dual-role Trust Game (TG). We employ data from a large-scale representative experiment (N = 774), where all subjects played both roles of a binary TG with real monetary incentives. Subjects’ social motives were inferred using their decisions in a Dictator Game and a dual-role Ultimatum Game. Next to self-interest and strategic motives we consider preferences for altruism, spitefulness, egalitarianism, and efficiency. We demonstrate that there exists considerable heterogeneity in motives in the TG. Most importantly, among individuals who choose to trust as trustors, social motives can differ dramatically as there is a non-negligible proportion of them who seem to act out of (strategic) self-interest whereas others are driven more by efficiency considerations. Subjects’ elicited trustworthiness, however, can be used to infer such motivations: while the former are not trustworthy as trustees, the latter are. We discuss that research on trust can benefit from adding the second player’s choice in TG designs.
    Keywords: trust game,dictator game,ultimatum game,social preferences,self-interest
    Date: 2016
  5. By: Halim, Edward; Riyanto, Yohanes Eko; Roy, Nilanjan
    Abstract: We report the results of an experiment designed to study the determinants of asset price movement and consumption smoothing behavior across asset markets populated with varying proportion of traders with and without having induced motive to smooth consumption. Although the asset is over-priced compared to the risk-neutral fundamental value in all sessions, the extent of over-pricing and magnitude of price movement is significantly higher when traders with no induced motive to trade are present. We also find that the price of the asset co-moves with the dividend state, with price predictability being higher in the presence of traders with induced motive to smooth consumption. Participants motivated to minimize consumption fluctuations are able to do so with the inclination being more for those having lower initial endowment. With fixed prices, traders are able to smooth consumption not only over periods but also over the dividend states.
    Keywords: Asset Markets, Uncertainty, Experimental Economics, Price Predictability, Consumption Smoothing
    JEL: C91 C92 D84 D91 G12
    Date: 2016–05–27
  6. By: Camille Cornand (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France); Cheick Kader M'baye (University of Bamako, Bamako, Mali)
    Abstract: We conduct laboratory experiments with human subjects to test the rationale of adopting a band versus point inflation targeting regime. Within the standard New Keynesian model, we evaluate the macroeconomic performances of both regimes according to the strength of shocks affecting the economy. We find that when the economy faces small shocks, the average level of inflation as well as its volatility are significantly lower in a band targeting regime, while the output gap and interest rate levels and volatility are significantly lower in a point targeting regime with tolerance bands. However, when the economy faces large shocks, choosing the suitable inflation targeting regime is irrelevant because both regimes lead to comparable performances. These findings stand in contrast to those of the literature and question the relevance of clarifying a mid-point target within the bands, especially in emerging market economies more inclined to large and frequent shocks.
    Keywords: band inflation target, point inflation target, inflation expectations, monetary policy, New Keynesian model, macroeconomic shocks, laboratory experiments
    JEL: E58 E52 C91 C92
    Date: 2016
  7. By: Riddell, Chris (Cornell University); Riddell, W. Craig (University of British Columbia, Vancouver)
    Abstract: The Self-Sufficiency Project was a well-known welfare-to-work experiment that provided a generous but time-limited financial incentive to leave welfare and enter the workforce. Experimental evidence showed large short-term impacts but no lasting effects. We argue that these conclusions need to be re-assessed. Policy changes implemented during the SSP implied the behavior of the control group did not provide an appropriate counterfactual. We estimate the impacts the financial incentive would have had in a stable policy environment. This re-assessment leads to significant changes in the lessons previously reached. Our study demonstrates that experimental findings need to be interpreted with care.
    Keywords: welfare-to-work policies, social experiments, Self-Sufficiency Project
    JEL: C90 H53 I38
    Date: 2016–05
  8. By: Nick Hanley (Department of Geography and Sustainable Development, University of St. Andrews); Mikolaj Czajkowski (University of Warsaw, Department of Economic Sciences, Poland)
    Abstract: This paper reports the results of a stated preference experiment designed to test for how information provided in a survey affects knowledge, and how knowledge affects preferences for a public good. A novel experimental design allows us to elicit subjects’ ex ante knowledge levels about a good’s attributes, exogenously vary how much new objective information about these attributes we provide to subjects, elicit subjects’ valuation for the good, and elicit posterior knowledge states about the same attributes. We find evidence of incomplete learning and fatigue: as subjects are told more information, their marginal learning rates decrease. We find there is no marginal impact of knowledge on the mean nor the variance of WTP for changes in the environmental good; but that ex ante knowledge does affect stated WTP. Our results are consistent with preference formation models of confirmation bias, costly search, or timing differences in learning and preference formation. Our results raise questions about the purpose and effects of providing information in stated preference studies
    Keywords: Learning, Information, Behavioral Economics, Decision Making Under Uncertainty
    JEL: D83 D81 Q51
    Date: 2016–04
  9. By: Ganglmair, Bernhard; Holcomb, Alex; Myung, Noah
    Abstract: Recent evidence of correlated trading among networked fund managers provides an indication that professional investors exchange investment ideas. To examine the motivations underlying this type of collaboration, we design a laboratory experiment in which competing fund managers share ideas until either chance or one of the fund managers (by choice to obtain a competitive advantage) terminates the exchange. We find that managers are more willing, and likely, to share when their rival's ability and intention to share in return are high. For a manager's decision to share, subjective expectations about rivals' intentions matter more than common expectations about their ability.
    Keywords: conversation, correlated trading, experimental finance, fund managers, hedge funds, information sharing, word-of-mouth communication
    JEL: C72 C91 D8 G02 G14 G23
    Date: 2016–05–06
  10. By: Larochelle, Catherine; Alwang, Jeffrey; Travis, Elli
    Abstract: This paper provides evidence from a randomized control trial (RCT) conducted among potato farmers in Northern Ecuador about the impact of receipt of text message reminders on farmer knowledge about and adoption of integrated pest management (IPM) practices. The paper provides novel empirical evidence of the potential roles of reminders as post-training follow-ups in an agrarian setting. Using psychological constructs, we examine competing explanations for non-standard decision making such as low adoption of beneficial agricultural technologies. Farmers who received text messages have significantly higher knowledge scores and are more likely to adopt most IPM practices than those in the control group. The experiment provides evidences that text messages lead to behavioral changes by reducing inattention and sub-optimal heuristics in the case of complex decisions.
    Keywords: Technology adoption, agricultural extension, information and communication technology, program evaluation, Community/Rural/Urban Development, Consumer/Household Economics, International Development, Teaching/Communication/Extension/Profession, O13, Q12, Q13,
    Date: 2016–05–20
  11. By: Jo, Jisung; Lusk, Jayson; Muller, Laurent; Ruffieux, Bernard
    Keywords: experiment, food labels, health, taste, value of information, willingness-to-pay, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Q18, I18, C93,
    Date: 2016
  12. By: Fabrice Le Lec (CES, Université de Paris 1, France); Marianne Lumeau (CEPN, Université de Paris 13, LABEX ICCA, France); Benoît Tarroux (CREM, UMR CNRS 6211, Faculté des Sciences Économiques, Université de Rennes 1, France)
    Abstract: This paper aims to test how the profusion of choice and information affects individuals' decisions. In particular, we investigate whether the possible choice overload effects are due to the mere presence of many alternatives or the difficulty in processing abundance of information that comes with the proliferation of options. To do so, we use the frequency with which familiar alternatives are preferred to unfamiliar ones as a behavioural measure of overload. We first propose an individual decision model, in which uncertainty about values of alternatives leads consumer to prefer familiar goods. We use this theoretical approach to devise an experiment where the level of information and the number of alternatives systematically vary. Our results show that individuals are prone to overload in the presence of larger choice sets, but that information has a small impact, if any.
    Keywords: Choice overload; Information overload; Bounded rationality; Familiarity; Experimental Economics
    JEL: C91 D03 D83
    Date: 2016–04
  13. By: Kettle,Stewart; Hernandez,Marco; Ruda,Simon; Sanders,Michael
    Abstract: This paper presents results from a large (43,387) nationwide randomized controlled trial in Guatemala that used reminders to promote tax compliance. The trial varied the letter received by taxpayers (individuals and firms) who had failed to pay their income tax for the 2013 tax year. Taxpayers were randomly allocated to receive either no letter, the letter originally used by the Guatemalan Tax Authority, or four letter variants adapted using behavioral design. The study finds that although all letters increased the rate of declaration, only two of the letters were successful at increasing the rate of payment and the average amount paid per letter received. The best performing treatments were a deterrent message framing non-declaration as an intentional and deliberate choice, rather than oversight (designed to overcome status quo bias), and a social norms message that referred to the 64.5 percent of taxpayers that had already paid this tax (join the status quo). These two interventions increased the rate of payment as well as the average amount paid conditional on paying, overall more than tripling tax receipts. The paper estimates that if sent to all taxpayers in the sample, in 11 weeks the social norms letter would have generated additional tax revenues of approximately US$760,000, which is 36 times the cost of sending the letters. The effects are persistent and remain at 12 month follow up, suggesting the letters are effective in increasing revenue for the tax authority rather than just bringing tax receipts forward.
    Keywords: Debt Markets,Tax Law,Taxation&Subsidies,Emerging Markets,Fiscal Adjustment
    Date: 2016–06–01
  14. By: Yi-Fang Liu (College of Management and Economics - Tianjin University); Jørgen Vitting Andersen (Centre d'Economie de la Sorbonne); Maxime Frolov (Centre d'Economie de la Sorbonne); Philippe de Peretti (Centre d'Economie de la Sorbonne)
    Abstract: Just like soldiers crossing a bridge in sync can lead to a catastrophic failure, we show via experiments, theory, and simulations, how synchronization in human decision making can lead to extreme outcomes. Individual decision making and risk taking are well known to be gender dependent. Much less is however understood about gender's impact on the creation of collective risk through aggregate decision making, where the decision of one individual can affect the decision making of other individuals, eventually leading to synchronization in behavior. To study the formation of collective risk created due to synchronization in human decision making, we have devised a series of experiments that can be analyzed and understood within a game theoretical framework. In the experiments each individual in groups of either men or women decide to buy or sell a financial asset based on an information set containing past price behavior. Risk can be generated collectively through coordination in the aggregate decision making, which leads to a price formation far from the fundamental value of the asset. Here we show how collective risks can be generated in groups of both genders, but the pathway to formation of collective risks happens through an individual risk taking which are different for groups composed of men respectively women. A priori we find that it is impossible to know whether a given group will engage in the formation of collective risk, but via a fluctuation based game theoretical framework we are able to estimate the likelihood that it will happen. Our results highlight some of the foundations for creation of excessive collective risks relevant for example in the understanding of financial systemic risks
    Keywords: collective decision making; synchronization; agent based modeling
    JEL: G1 G12 G14
    Date: 2016–03
  15. By: Loic Berger (Fondazione Eni Enrico Mattei (FEEM)); Valentina Bosetti (Bocconi University and Fondazione Eni Enrico Mattei (FEEM))
    Abstract: The results of an experiment extending Ellsberg's setup demonstrate that attitudes towards ambiguity and compound uncertainty are closely related. However, this association is much stronger when the second layer of uncertainty is subjective than when it is objective. Provided that the compound probabilities are simple enough, we find that most subjects, consisting of both students and policy makers, (1) reduce compound objective probabilities, (2) do not reduce compound subjective probabilities, and (3) are ambiguity non-neutral. By decomposing ambiguity into risk and model uncertainty, and jointly eliciting the attitudes individuals manifest towards these two types of uncertainty, we characterize individuals' degree of ambiguity aversion. Our data provides evidence of decreasing absolute ambiguity aversion and constant relative ambiguity aversion.
    Keywords: Ambiguity Aversion, Model Uncertainty, Reduction of Compound Lotteries, Non-expected Utility, Subjective Probabilities, Decreasing Absolute Ambiguity Aversion
    JEL: D81
    Date: 2016–05
  16. By: Paul J. Healy (Department of Economics, Ohio State University); Yaron Azrieli (Department of Economics, Ohio State University); Christopher P. Chambers (Department of Economics, University of California, San Diego)
    Abstract: When subjects in an experiment are given multiple decisions, their choices in one decision may be distorted by the choices made in others. An experiment’s payment mechanism is incentive compatible if no such distortions occur. Azrieli et al. (2014) provide two characterizations of incentive compatible mechanisms in a general decision-theoretic framework in subjects’ choices are represented as Savage-style acts. In particular, paying for one randomly-chosen problem — the Random Problem Selection (RPS) mechanism — is incentive compatible when we assume preferences satisfy event-wise monotonicity, and nothing else. Here, we consider the case where subjects view gambles as objective lotteries. Using completely different proof techniques, we show that the set of incentive compatible mechanisms under the monotonicity assumption is strictly larger than in the acts case. We discuss these new incentive compatible mechanisms in detail.
    Keywords: Experimental design, decision theory, mechanism design
    JEL: D81 D84
    Date: 2016–05
  17. By: Zhao, Shuoli; Yue, Chengyan; Wang, Yumeng
    Abstract: Many food companies are developing nanotechnology modified food packages and it is critical to understand the informational and attitudinal factors that influence public acceptance of nano-packaging. This study uses experimental auction with real nano-packaged products to test and compare consumer acceptance for nano-packaged food products with information from various sources. The results indicate when provided with information from different sources, consumer acceptance for and attitude toward nano-packaged food products are changing: for plain-labeled food products, reliance on government regulation was the only determinant influencing participants’ willingness to pay; after general information about nanotechnology was given, participants were willing to pay more for nano-packaged products, which was affected by their general attitude towards new food technology and concerns about environment/health; when detailed information were provided, concern about the environment/health became the only factor that significantly influenced participant willingness to pay for nano-packaged food products.
    Keywords: Nano-package, Nanotechnology, Experimental Auction, Structural Equation Model, Information Effect, Willingness-to-Pay, Consumer/Household Economics, Marketing,
    Date: 2016
  18. By: André Schmelzer (Max Planck Institute for Research on Collective Goods)
    Abstract: This paper experimentally studies an essential institutional feature of matching markets: Randomization of allocation priorities. I compare single and multiple randomization in the student assignment problem with ties. The Gale-Shapley deferred acceptance algorithm is employed after indifferences in school priorities are resolved by either random procedure. The main result is that a significant fraction of individuals prefers multiple to single randomization, although both are equivalent in expectation. Multiple randomization is perceived to be fairer. One theoretical explanation is the failure to disregard compound lotteries. These results show that random procedures are not inherently neutral with respect to preferences and fairness perceptions.
    Keywords: market design, school choice, mechanism design, experiment, deferred acceptance algorithm, randomization, tie-breaking
    JEL: C78 C91 D78 D81
    Date: 2016–05
  19. By: Shen, Meng; Gao, Zhifeng
    Abstract: Colors can carry specific meaning and have an important influence on people’s feelings, thoughts and behaviors. This paper investigates the impact of blue versus red on how consumers process information in food choice. Results show color indeed influences consumer information processing and feature evaluation. Specifically, consumers spend more time and pay more attention to choice tasks in the red condition than in the blue condition. In addition, consumers are willing to pay more premium for certain feature on the red label than on the blue label.
    Keywords: Choice experiment, Color, Information Processing, Willingness-to-pay, Agribusiness, Consumer/Household Economics, Marketing,
    Date: 2016–05–25
  20. By: Herrmann, Tabea; Hübler, Olaf; Menkhoff, Lukas; Schmidt, Ulrich
    Abstract: This paper complements evidence on the Allais paradox from advanced countries and educated people by a novel investigation in a poor rural area. The share of Allais-type behavior is indeed high and related to characteristics of 'lacking ability', such as poor education, unemployment, and little financial sophistication. Based on prospective reference theory, we extend these characteristics by biased processing of probabilistic information. Finally, we reveal that Allais-type behavior is linked to risk-related characteristics, such as risk tolerance and optimism. This indicates a potential problem as exactly the more dynamic among the poor tend to make inconsistent decisions under uncertainty.
    Keywords: field experiments,Allais paradox,socio-demographic characteristics,prospective reference theory,first order stochastic dominance,risk attitude,optimism
    JEL: D81 D03 O10
    Date: 2016
  21. By: Elskamp, Rebecca
    Abstract: This study empirically links current behaviour with past performance in a competitive multi-unit auction setting to test extensions of the learning-by-doing hypothesis. A particular advantage of the data set is that it contains complete bidding histories from a multi-unit auction that recently underwent a design change from a uniform to a discriminatory auction format. Characteristics of this unique natural experimental setting ensures bidders were inexperienced in the discriminatory auction format and that experience at the individual bidder level can be accurately measured. Following the change in auction format, bidders are identified as adjusting their bid prices in a direction consistent with equilibrium predictions, confirming bidders’ ability to learn from experience. Furthermore, while controlling for individual effects through bidder fixed effects, regression results suggest that winning and losing experiences have asymmetric effects on adjustments individual bidders make to their bidding strategy. In particular, losing experiences prompt bidders to increase bid prices whereas winning experiences explain reductions in bid prices. These learning effects are found to taper off shortly after a year following the implementation of the discriminatory auction format. Results of this study are important for policy makers and auctioneers of real-life auctions that may be contemplating a change in auction format. This study provides some insight into the time it takes for bidders to learn optimal bidding strategies which is important from a practical perspective as suboptimal behaviour negatively impacts the allocative efficiency and revenue earned by the auction mechanism.
    Keywords: Uniform auction, discriminatory auction, learning, experience, Marketing,
    Date: 2016
  22. By: Reeling, Carson; Verdier, Valentin; Lupi, Frank
    Abstract: "Preference point" lotteries, under which the probability an applicant is drawn increase with their stock of preference points earned over time, are widely used to allocate access to many economically important natural resources (e.g., big game hunting opportunities). Lotteries form a natural choice experiment: by observing the opportunities for which an individual applies, the alternatives not chosen, the associated costs, the probability of winning a permit, etc., statistical inferences can be made about how individuals trade off site characteristics for cost. Knowledge of these trade-o ffs can then be used to estimate applicants' willingness to pay for site quality characteristics and site access. Two key features of recreationalists' choices under preference point lottery are (i) forward-looking behavior (since the odds of winning a permit depend on the accumulated stock of preference points) and (ii) equilibrium sorting (whereby individuals decide where to apply based on their expectations of others' choices and vice versa). We develop a novel revealed preference method for estimating individuals' willingness to pay for access to recreational opportunities allocated by preference point lottery that accounts for these two features. We apply our model to the case study of black bear hunting in Michigan. We estimate total willingness to pay for access to a small site to be nearly $200,000.
    Keywords: dynamic discrete choice model, equilibrium sorting, lottery, preference points, revealed preference, travel cost, Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, C2, C5, D9, Q26, Q51,
    Date: 2016

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