The impact of deal-proneness on WTP estimates in incentive-aligned value elicitation methods

Even after controlling for hypothetical biases, some incentive-aligned value elicitation methods still produce different willingness-to-pay (WTP) estimates. In this study, we compare WTP estimates from three incentive-aligned value elicitation methods: real choice experiment (RCE), real double-bounded dichotomous contingent valuation (RCVM), and Becker-DeGroot-Marschak auction (BDM). We find that participants' aggressiveness in obtaining low prices (i.e., deal-proneness) influences WTP estimates in the BDM auction, but not those elicited from the RCE and RCVM. The participants with higher levels of deal-proneness tend to submit lower bids in the BDM auction. The discrepancies in WTP estimates between different incentive-aligned procedures are narrower for participants with lower levels of deal-proneness. Our results indicate that the bids in BDM auctions may be understated and the auction mechanism may induce the gambling behavior of people who are deal-prone. That is, whether the BDM auction is truly incentive-aligned is again called into question. We also discuss the practical implications for food retailers.