Anchoring, Information, and Fragility of Choice Experiments: An Application to Consumer Willingness to Pay for Rice with Improved Storage Management

Abstract

This study uses an experimental auction and a discrete choice experiment to determine consumers' willingness to pay (WTP) for rice with improved insect control and for rice stored using Integrated Pest Management and investigates potential reasonsÑanchoring and informationÑwhy some studies have found inconsistencies between the two methods. Results indicate that WTP estimates from the choice experiment are lower than consumers' average auction bids. Anchoring in the choice experiment appears to be an explanation for the discrepancy. Providing consumers with additional information about the products improved choice experiment results, producing consistent preference ordering and increasing WTP estimates.

Keywords

• anchoring
• choice experiment
• information sources
• second-price auction
• willingness to pay