Environmental and Resource Economics

, Volume 30, Issue 3, pp 327–343 | Cite as

Is Cheap Talk Effective at Eliminating Hypothetical Bias in a Provision Point Mechanism?

  • James J. Murphy
  • Thomas Stevens
  • Darryl Weatherhead


Significant difference between response to real and hypothetical valuation questions is often referred to as hypothetical bias. Some economists have had success with using “cheap talk” (which entails reading a script that explicitly highlights the hypothetical bias problem before participants make any decisions) as a means of generating unbiased responses in a referendum format. In this article, we test the robustness of cheap talk using a voluntary contribution mechanism with a provision point over a wide range of possible payment amounts. Our results confirm the existence of hypothetical bias, and suggest that cheap talk may eliminate hypothetical bias, but only for respondents facing higher payments.


contingent valuation experiments hypothetical bias voluntary contributions 


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Copyright information

© Springer 2005

Authors and Affiliations

  • James J. Murphy
    • 1
  • Thomas Stevens
    • 2
  • Darryl Weatherhead
    • 3
  1. 1.Department of Resource Economics, and the Center for Public Policy and AdministrationUniversity of MassachusettsAmherstUSA
  2. 2.Department of Resource EconomicsUniversity of MassachusettsAmherstUSA
  3. 3.US Environmental Protection AgencyOffice of Air Quality Planning and StandardsUSA

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