In choice experiments, it is commonly assumed that individuals make choices in static and certainty decision-making conditions. Real-world choices, however, are usually made in a dynamic setting. Committing a purchase decision under conditions of uncertainty might have a “Commitment Cost” (CC). In this study, we test CC theory using a nonhypothetical choice experiment. Specifically, we test whether choice behavior and willingness to pay estimates differ when individuals have the option to gain present or delayed information or reverse the transaction. Our results suggest that the construction of a dynamic decision context can be relevant in the design of choice experiments. (JEL C90, C93, Q18)
Bazzani Claudia, Caputo Vincenzina, Nayga Rodolfo M., Canavari Maurizio (2017). TESTING COMMITMENT COST THEORY IN CHOICE EXPERIMENTS. ECONOMIC INQUIRY, 55(1), 383-396 [10.1111/ecin.12377].
TESTING COMMITMENT COST THEORY IN CHOICE EXPERIMENTS
BAZZANI, CLAUDIA;CAPUTO, VINCENZINA;CANAVARI, MAURIZIO
2017
Abstract
In choice experiments, it is commonly assumed that individuals make choices in static and certainty decision-making conditions. Real-world choices, however, are usually made in a dynamic setting. Committing a purchase decision under conditions of uncertainty might have a “Commitment Cost” (CC). In this study, we test CC theory using a nonhypothetical choice experiment. Specifically, we test whether choice behavior and willingness to pay estimates differ when individuals have the option to gain present or delayed information or reverse the transaction. Our results suggest that the construction of a dynamic decision context can be relevant in the design of choice experiments. (JEL C90, C93, Q18)I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
