Alternative calibration and auction institutions for predicting consumer willingness to pay for nongenetically modified corn chips

This study explores two important issues in experimental economics: calibra tion and auction institution. Consumer willingness-to-pay bids for com chip s made with nongenetically modified ingredients are elicited in first- and second-price auctions. Results suggest that responses to scale-differential questions, elicited in a survey, accurately predicted consumer willingness -to-pay bids. While the second-price auction induced a greater percentage o f marginal bidders to offer a positive bid compared to the first-price auct ion, average bid levels in the first- and second-price auctions were not st atistically different from one other. In a small and unrepresentative sampl e, 70% of student participants were unwilling to pay to exchange a bag of c hips made from genetically modified ingredients for a bag of chips made fro m nongenetically modified ingredients. However, 20% of respondents were wil ling to pay at least $0.25/oz. for the exchange.