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Appears in Collections:Economics Working Papers
Peer Review Status: Refereed
Title: What is the Causal Effect of Information and Learning about a Public Good on Willingness to Pay?
Other Titles: SEDP-2014-05
Author(s): Czajkowski, Mikolaj
Hanley, Nicholas
LaRiviere, Jacob
Simpson, Katherine
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Citation: Czajkowski M, Hanley N, LaRiviere J & Simpson K (2014) What is the Causal Effect of Information and Learning about a Public Good on Willingness to Pay? [SEDP-2014-05]. Stirling Economics Discussion Paper, 2014-05.
Keywords: Bayesian
Public Goods
Behavioral Economics
Stated Preference
JEL Code(s): Q51: Valuation of Environmental Effects
D83: Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
D81: Criteria for Decision-Making under Risk and Uncertainty
Issue Date: 30-Apr-2014
Date Deposited: 15-Apr-2014
Series/Report no.: Stirling Economics Discussion Paper, 2014-05
Abstract: In this study we elicit agents' prior information set regarding a public good, exogenously give information treatments to survey respondents and subsequently elicit willingness to pay for the good and posterior information sets. The design of this field experiment allows us to perform theoretically motivated hypothesis testing between different updating rules: non-informative updating, Bayesian updating, and incomplete updating. We find causal evidence that agents imperfectly update their information sets. We also field causal evidence that the amount of additional information provided to subjects relative to their pre-existing information levels can affect stated WTP in ways consistent overload from too much learning. This result raises important (though familiar) issues for the use of stated preference methods in policy analysis.
Type: Working Paper
Affiliation: University of Warsaw
University of Tennessee

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