Polarized Preferences in Homegrown Value Auctions

Abstract

Homegrown value-auction experiments are useful for exploring preferences for controversial product attributes. These auctions have emphasized estimating the effect of the attribute on the willingness to pay (WTP) for a product. The likelihood that individuals are willing to purchase any products with the attribute has received less attention, even though this could also be useful to researchers, marketers, and policy makers. This article shows how simultaneous, single-unit auctions can be used to estimate not just WTPs, but also the likelihood that individuals are willing to purchase any products with a controversial attribute.

Keywords

• consumer preferences
• experimental economics
• homegrown value auctions
• invasive species
• polarization
• willingness to pay