An Evaluation of Attribute Anchoring Bias in a Choice Experimental Setting

FCN Working Paper No. 6/2013

Posted: 2 Feb 2014

See all articles by Marjolein J. W. Harmsen - van Hout

Marjolein J. W. Harmsen - van Hout

Lehrstuhl für Wirtschaftswissenschaften, insb. Energieökonomik; Institute for Future Energy Consumer Needs and Behavior (FCN); E.ON Energy Research Center; RWTH Aachen

Gaurav S. Ghosh

Pennsylvania State University - College of Agricultural Sciences - Department of Agricultural Economics and Rural Sociology

Reinhard Madlener

RWTH Aachen University

Date Written: April 2013

Abstract

We investigate consumer valuations of technical, home-related energy-saving measures (ESMs) and their attributes through a choice experiment. Unlike previous literature we expect heuristic decision-making, as decisions about ESMs are complex. Specifically, in our experimental design we focus on the effects of attribute anchoring through inclusion of an innovative element. We investigate anchoring-and-adjustment (A&A) in a choice-experimental framework, expecting it on attributes. Our question is: does A&A lead to a correct elicitation of the overall valuation or are adjustments insufficient, leading to attribute anchoring bias? To evaluate this, our participants can read attribute information only after clicking on covering buttons. Clicking data reveal what information they use in what order, which provides objective perceived ESM-attribute importance measures to be included as control variables in the estimations. For the experiment we perform a representative online survey among 1084 German residents. Mixed logit analysis cannot show that ESM valuations are affected by attribute anchoring bias, which indicates accuracy of our estimations, and through inference of those in other choice experiments. We also report statistics on ESM-attribute valuations differentiated by e.g. demographics, which is relevant for suppliers and policy-makers alike.

Suggested Citation

Harmsen - van Hout, Marjolein J. W. and Ghosh, Gaurav S. and Madlener, Reinhard, An Evaluation of Attribute Anchoring Bias in a Choice Experimental Setting (April 2013). FCN Working Paper No. 6/2013 . Available at SSRN: https://ssrn.com/abstract=2388706 or http://dx.doi.org/10.2139/ssrn.2388706

Marjolein J. W. Harmsen - van Hout (Contact Author)

Lehrstuhl für Wirtschaftswissenschaften, insb. Energieökonomik; Institute for Future Energy Consumer Needs and Behavior (FCN); E.ON Energy Research Center; RWTH Aachen ( email )

Aachen
Germany

HOME PAGE: http://www.eonerc.rwth-aachen.de/aw/cms/website/themen/~shg/fcn/lang/en/

Gaurav S. Ghosh

Pennsylvania State University - College of Agricultural Sciences - Department of Agricultural Economics and Rural Sociology ( email )

University Park, PA 16802-3306
United States

Reinhard Madlener

RWTH Aachen University ( email )

School of Business and Economics / E.ON ERC
Mathieustraße 10
Aachen, 52074
Germany
+49 241 80 49 820 (Phone)
+49 241 80 49 829 (Fax)

HOME PAGE: http://www.eonerc.rwth-aachen.de/fcn

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