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Publications
Publications
  • April 2020
  • Article
  • Journal of Economic Behavior & Organization

Field Comparisons of Incentive-Compatible Preference Elicitation Techniques

By: Shawn A. Cole, A. Nilesh Fernando, Daniel Stein and Jeremy Tobacman
  • Format:Print
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Abstract

Knowledge of consumer demand is important for firms, policy makers, and economists. One common tool for incentive-compatible demand elicitation, the Becker-DeGroot-Marschak (BDM) mechanism, has been widely used in laboratory settings but rarely evaluated for reliability at large scale in the field. In two field experiments (for a new agricultural information service and rainfall index insurance) we compare demand curves estimated from BDM implementations with demand curves estimated from choices at individual randomized fixed prices. In the test (for an agricultural information service) we obtain demand curves from BDM and fixed prices that align closely and are unable to reject equivalence of the demand curves. For the second test (of rainfall index insurance) the results are mixed, with the distributions lining up well at certain points of the demand curve and deviating at others. Overall, we find no evidence for systematic bias. Our evidence suggests that a “reframed” version of BDM that uses discrete prices may minimize non-standard bidding behavior and is well suited to future experimental work in low-literacy environments.

Keywords

Incentive-compatible Elicitation; Experimental Methods; Weather Insurance; Rainfall Insurance; Agricultural Extension; Demand and Consumers

Citation

Cole, Shawn A., A. Nilesh Fernando, Daniel Stein, and Jeremy Tobacman. "Field Comparisons of Incentive-Compatible Preference Elicitation Techniques." Journal of Economic Behavior & Organization 172 (April 2020): 33–56.
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About The Author

Shawn A. Cole

Finance
→More Publications

More from the Authors

    • September 2025
    • Journal of Development Economics

    Using Satellites and Phones to Evaluate and Promote Agricultural Technology Adoption: Evidence from Smallholder Farms in India

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    • March 2025 (Revised June 2025)
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More from the Authors
  • Using Satellites and Phones to Evaluate and Promote Agricultural Technology Adoption: Evidence from Smallholder Farms in India By: Shawn Cole, Tomoko Harigaya, Grady Killeen and Aparna Krishna
  • Getting to Net Zero: The Role of the Financial Sector By: Shawn Cole, Jonah Zahnd, Karina Chung and Jack Cenovic
  • Using Satellites and Phones to Evaluate and Promote Agricultural Technology Adoption: Evidence from Smallholder Farms in India By: Shawn Cole, Grady Killeen, Tomoko Harigaya and Aparna Krishna
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