Tag
BDM_mechanism
5 findings
Behaviour & psychologyBecker-DeGroot-Marschak Contract Valuation DisconnectMean willingness-to-pay for the real policy was Rs. 68.4 (median Rs. 70). Modifying the exit threshold increased expected payout value by Rs. 40-70 but only increased willingness-to-pay by Rs. 10.86 (p < 0.01); reducing per-mm shortfall payouts reduced expected value by Rs. 10-20 and reduced willingness-to-pay by Rs. 11.90 (p < 0.01). Introducing basis risk (distant station) halved valuation, reducing bids by Rs. 29.45 (p < 0.01).RCTMethods & evidenceOrder Independence in Field BDM ValuationMean willingness-to-pay bids were virtually identical across orderings (Real policy: Rs. 69.0 in Ordering 1 vs. Rs. 67.9 in Ordering 2; Basis risk policy: Rs. 38.9 vs. Rs. 39.1), confirming complete order independence.RCTMethods & evidenceTangible Goods Simulation for Field BDM AuctionsPractice rounds enabled successful implementation of 4-contract BDM elicitations across 1,978 rural subjects, resulting in zero instances of participants refusing to complete winning transactions.RCTFinance & microfinanceBecker-DeGroot-Marschak Contract Term MispricingRaising the exit threshold increased willingness to pay by Rs. 11 despite increasing expected payout by Rs. 40–70, whereas reducing millimeter deficit payments reduced willingness to pay by Rs. 12–13 while only lowering expected payout value by Rs. 10–20.RCTDevelopmentBecker-DeGroot-Marschak Wage Elicitation MechanismOver 60% of participants accepted low piece rates (10 MWK/unit, yielding ~70 MWK daily earnings plus 50 MWK participation fee). Ex-post refusal rates were under 3% and declined over time, confirming that workers learned and adhered to truthful wage revelation.RCT