The influence of cheap talk on willingness-to-pay ranges: Some empirical evidence from a contingent valuation study

Pierre Alexandre Mahieu; Pere Riera; Marek Giergiczny

doi:10.1080/09640568.2011.626524

The influence of cheap talk on willingness-to-pay ranges: Some empirical evidence from a contingent valuation study

Pierre Alexandre Mahieu, Pere Riera, Marek Giergiczny

Department of Applied Economics

Research output: Contribution to journal › Article › Research › peer-review

26 Citations (Scopus)

Abstract

Different instruments have been developed to mitigate the hypothetical bias in contingent valuation surveys. One, labelled 'cheap talk', warns participants about the hypothetical bias phenomenon prior to the valuation question. This paper investigates the effects of cheap talk on willingness-to-pay ranges, in a case study on remote mountain lakes. An open-ended follow-up question is added to a payment ladder to elicit the maximum amount an individual would definitely pay and the minimum amount above which they would definitely refuse to pay. The main conclusion is that cheap talk has no influence on the width of people's willingness-to-pay range, but is effective at lowering the mean willingness-to-pay. © 2012 Copyright Taylor and Francis Group, LLC.

Original language	English
Pages (from-to)	753-763
Journal	Journal of Environmental Planning and Management
Volume	55
Issue number	6
DOIs	https://doi.org/10.1080/09640568.2011.626524
Publication status	Published - 1 Jul 2012

Keywords

cheap talk
contingent valuation
hypothetical bias
uncertainty
willingness-to-pay range

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