HYPOTHETICAL SURVEYS AND REAL ECONOMIC COMMITMENTS

We provide controlled laboratory evidence that open-ended hypothetical surveys do not always accurately elicit real economic commitments fro m individuals. We argue that they can provide biased measures of true values, where the latter are elicited using incentive-compatible insti tutions. We also evaluate if it is the hypothetical-payment aspect of these surveys which results in these biases or the lack of explicitly incentive-compatible provision rules. We conclude that it is the forme r. We are unable to devise a hypothetical survey that uses an incentiv e-compatible provision rule to elicit valuations that are demonstrably truthful.