Field Comparisons of Incentive-Compatible Preference Elicitation Techniques

Abstract

This paper evaluates the Becker-DeGroot-Marschak (BDM) mechanism for incentive-compatible demand elicitation outside the lab. In two field experiments — for a new agricultural information service and for rainfall index insurance — demand curves estimated from BDM align closely with those from individually randomized fixed prices for the information service, with more mixed results for insurance. Overall, the paper finds no evidence of systematic bias, supporting the use of discrete-price BDM in low-literacy field settings.