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Updated: Jun 22, 2026

Methods for Presenting Real-world Objects Under Controlled Laboratory Conditions
Published on: June 21, 2019
Hypothetical bias, cheap talk, and stated willingness to pay for health care
Semra Ozdemir1, F Reed Johnson, A Brett Hauber
1Department of Environmental Sciences and Engineering, Gillings School of Global Public Health, University of North Carolina, Chapel Hill, NC 27599, USA. semra@email.unc.edu
Abstract:
Subjects with rheumatoid arthritis (RA) enrolled in an online panel were asked to evaluate pairs of treatment alternatives with different attributes. Half of the sample saw a cheap-talk text. Preference parameters were estimated using random-parameters logit models to account for unobserved taste heterogeneity. The models also were estimated in willingness-to-pay (WTP) space instead of conventional utility space. Cheap talk not only affected the coefficient on the cost attribute, but also preferences for other attributes. WTP estimates were generally lower in cheap talk sample, except for the most important attribute and a 2-level attribute. Subjects who were presented with cheap talk discriminated between the adjoning attribute levels better than the subjects in the control sample.
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