Cason and Plott (J Polit Econ, 122(6):1235–1270, 2014) show that subjects’ misconception about the incentive properties of the Becker-DeGroot-Marschak (BDM) value elicitation procedure can generate data patterns that look like—and might thus be misinterpreted as evidence for—preferences constructed from endowments or reference points. We test whether game form misconceptions are necessary to produce willingness-to-pay (WTP) vs. willingness-to-accept (WTA) gaps in a valuation experiment in which subjects are randomly assigned to the role of either buyer or seller. We employ a design that allows us to identify whether a subject understood the incentive properties of a price-list version of the BDM mechanism. We find a robust WTP-WTA gap, even among subjects whose elicited valuations for a good of induced and known monetary value and whose ability to identify the payoffs resulting from their choices indicate an understanding of the incentive properties of the BDM mechanism. We conclude that game form misconceptions are not a necessary condition for the emergence of WTP-WTA gaps.

Environmental and consumer groups have called for mandatory labeling ofgenetically engineered (GE) food products in the United States, stating thatconsumers have the “right to know.” Herein, we use a nonhypothetical fieldexperiment to examine the willingness to pay for GE-labeled products, usingthe only second-generation GE product currently on the U.S. market—GEcigarettes. Our results suggest consumers pay less for GE-labeled cigaretteswhen marketing information is absent. But, when presented with marketinginformation on the attributes of the cigarette, we find no evidence thatconsumers pay less for GE-labeled cigarettes.