Preference learning in consecutive experimental auctions

This paper explores the origins of the strikingly high price premia paid fo r new food products in lab valuation exercises Our experimental design dist inguishes between two explanations of this phenomenon: novelty of the exper imental experience versus the novelty of the good, i.e., preference learnin g-bids reflect a person's desire to learn how an unfamiliar good fits into their preference set. Subjects bid in four consecutive experimental auction s for three goods that vary in familiarity, candy bars mangos and irradiate d meat. Our results suggest that preference learning is the main source of the high premia, and that novelty of the experimental experience does not i n itself artificially inflate valuations.