Impact of Process Misconception in Becker-DeGroot-Marschak Single Response Value Elicitation Procedures : An Experimental Investigation in Consumer Behavior Using the IKEA Effect

Consumer researchers frequently employ valuation experiments to assess consumer opinionsand test related hypotheses. One popular method used in many such experiments is the Becker-DeGroot-Marschak (BDM) single-response value elicitation procedure that initiates an incentive forthe subjects to respond with their true valuation by utilizing a random bid to which the participants’bid is compared. However, the “random bid” is not a straightforward concept, and the participantsmay not fully understand the mechanics of the bidding process. Therefore, they may incorrectlyassociate the bidding mechanism with a conventional auction bidding process in which the highestbidder wins, causing biased valuation outcomes. In this paper, we introduce a comprehensionmeasurement step to eliminate the process comprehension bias in BDM valuation experiments. Wealso discuss the potential impact of the treatment of “zero” bidders in the BDM procedure. Thepresent work shows that the size and statistical significance of past consumer research results arepositively correlated with the participant comprehension of the valuation procedure. The resultssuggest that consumer research using a single-response value elicitation procedure, which initiates an incentive for the subjects to respond with their true valuation, may not be trusted if the comprehension level is not controlled