July 1985
Western Journal of Agricultural Economics
TABLE 3. Estimated Bid Curves for Alternative Question Formats.
was observed most frequently in games
using $1 starting values. Choice of ques-
tion format also appeared to be a relevant
factor. In WTP questions, 95% of the cases
where final bid equalled initial bid, the
starting bid was $1. Conversely, in WTAC
questions, 74% of the cases involved either
$800 or $8,000 starting bids. Overall,
however, the phenomenon was observed
with nearly the same frequency in WTP
and WTAC question formats. It was found
that only 6 respondents out of the sample
of 100 reported final bids equal to starting
bids for both bidding games they played.
These respondents were therefore respon-
sible for 12 (16%) of the 76 instances where
the phenomenon was observed. This sug-
gests that the phenomenon is not simply
a sampling peculiarity.
Recalculated mean bids were less di-
vergent for alternative starting values.
Furthermore, in all but one question for-
mat, revised mean bids for larger starting
values were less than revised mean bids
for $1 starting values. A positive relation-
ship between starting bid and final mean
bids was therefore not evident. Again, four
pairwise t-tests were conducted to detect
statistically significant differences be-
tween revised mean final bids for alter-
native starting value. Only the revised
mean bids for the annual WTAC question
could be shown to be significantly differ-
ent from each other at the 0.10 level of
significance.
Discussion and Conclusion
Selection of starting values in iterative
bidding games appears to influence final
mean bids in a variety of ways. Starting
values seem to alter the perceived realism
of the hypothetical market being created,
and thereby influence refusal rates. There
also appears to be a link between starting
values, question format and respondents’
acceptance of starting bids as final bids.
However, even after these factors are ac-
counted for, starting value selection can
38
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