Do auctions lower WTP estimates? An artefactual field experiment

Abstract

This study compares the willingness to pay (WTP) estimates for a jar of honey from a second price Vickrey auction to the Posted Price setting (also known as the dichotomous choice, or the take-it-or-leave-it) with 115 adult participants. Consumers‘ WTP are about 50% lower in the auction compared to the Posted Price. Several potential explanations are proposed for the difference.