Valuation under Fuzzy Preferences

38 Pages Posted: 12 Sep 2013

See all articles by Katherine Silz Carson

Katherine Silz Carson

US Air Force Academy

Susan M. Chilton

University of Newcastle - Economics

W. George Hutchinson

Queen's University Belfast

Date Written: January 15, 2012

Abstract

This paper reports the results of an experiment in which subjects with fuzzy induced values vote in a public goods referendum. The experiments demonstrate that if subjects’ preferences for a good are vague in the sense described by fuzzy numbers, their behavior in a referendum for a public good diverges significantly from what standard utility theory predicts when preferences are crisp. By exploiting the direct link between multiple bound uncertainty choice elicitation and fuzzy numbers we are subsequently able to incorporate this feature into the analysis of field willingness to pay data and demonstrate how information about the fuzziness of a respondent’s preferences obtained from payment card survey data can be incorporated into an interval data estimator of willingness to pay.

Keywords: Non-market valuation, fuzzy preferences, experimental economics

JEL Classification: C91, Q51

Suggested Citation

Carson, Katherine Silz and Chilton, Susan M. and Hutchinson, W. George, Valuation under Fuzzy Preferences (January 15, 2012). Available at SSRN: https://ssrn.com/abstract=2324369 or http://dx.doi.org/10.2139/ssrn.2324369

Katherine Silz Carson (Contact Author)

US Air Force Academy ( email )

HQ USAFA/DFEG
2354 Fairchild Drive, Suite 6K110
USAF Academy, CO 80840-6299
United States

Susan M. Chilton

University of Newcastle - Economics ( email )

Newcastle-upon-Tyne NE1 7RU
United Kingdom

W. George Hutchinson

Queen's University Belfast ( email )

David Leir Building
Belfast, BT9 5AG
Ireland

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