Social Preferences and Communication as Stigma Mitigation Devices- Evidence from Recycled Drinking Water Experiments
Date
2017-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Department of Applied Economics and Statistics, University of Delaware, Newark, DE.
Abstract
Differences between private and public decision-making are quantified using willingness-to-accept (WTA) data collected in artefactual field experiments. Participants first make decisions in a second-price auction (private rounds) followed by majority-rule voting (public rounds) on the median price collected in the private rounds. Results suggest that other-regarding behavior in the public rounds regarding stigma and disgust can significantly reduce WTA. Chat-box communication can further reduce WTA, and social preferences, education, and unrelated communication are the primary drivers that lead participants to accept significantly lower prices for potentially disgusting tasks. The
results have application for sustainable, cost-effective recycled water projects.
Description
Keywords
Communication, Second-price auction, Other-regarding behavior, Majority-rule voting, Willingness to accept, Experimental economics, Water recycling