Eliciting willingness-to-pay to decompose beliefs and preferences that determine selection into competition in lab experiments

Yvonne Jie Chen, Deniz Dutz, Li Li, Sarah Moon, Edward Vytlacil, Songfa Zhong

Research output: Contribution to journalArticlepeer-review

Abstract

This paper develops a partial-identification methodology for analyzing self-selection into alternative compensation schemes in a laboratory environment. We formulate a model of self-selection in which individuals select the compensation scheme with the largest expected valuation, which depends on individual- and scheme-specific beliefs and non-monetary preferences. We characterize the resulting sharp identified sets for individual-specific willingness-to-pay, subjective beliefs, and preferences, and develop conditions on the experimental design under which these identified sets are informative. We apply our methods to examine gender differences in preference for winner-take-all compensation schemes. We find that what has commonly been attributed to a gender difference in preference for performing in a competition is instead explained by men being more confident than women in their probability of winning a future (though not necessarily a past) competition.

Original languageEnglish (US)
Article number105652
JournalJournal of Econometrics
DOIs
StateAccepted/In press - 2024

Keywords

  • Elicitation
  • Experiment
  • Gender difference
  • Partial identification

ASJC Scopus subject areas

  • Economics and Econometrics
  • Applied Mathematics

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