Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 309: Do you do what you say or do you do what you say others do?
Fredrik Carlsson (), Dinky Daruvala () and Henrik Jaldell ()
Additional contact information
Fredrik Carlsson: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: School of Business, Economics and Law, Göteborg University, Box 640, SE 40530 GÖTEBORG
Dinky Daruvala: Department of Economics, Karlstad University, Postal: SE-651 88 Karlstad, Sweden
Henrik Jaldell: Department of Economics, Karlstad University, Postal: SE-651 88 Karlstad, Sweden
Abstract: We design a donations vs. own money choice experiment comparing three different treatments. In two of the treatments the pay-offs are hypothetical. In the first of these, a short cheap talk script was used, and subjects were required to state their own preferences in this scenario. In the second, subjects were asked to state how they believed an average student would respond to the choices. In the third treatment the pay-offs were real, allowing us to use the results to compare the validity of the two hypothetical treatments. We find a strong hypothetical bias in both hypothetical treatments where the marginal willingness to pay for donations are higher when subjects state their own preferences but lower when subjects state what they believe are other students preferences. The explanation is probably a self-image effect in both cases. We find that it is mainly women who are prone to hypothetical bias in this study.
Keywords: Stated preferences; cheap talk; hypothetical bias; third person approach; choice experiment
22 pages, June 12, 2008
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