Testing Distributional Dependence in the Becker-DeGroot-Marschak ...

esponses was recorded, so the informational history of every subject at each time they submitted
a reported valuation (either initially or as a revision) is known.
The item used in this experiment was a gift certificate for a dozen cookies from a new and
popular ice cream shop near campus. This item had a relatively modest price, so it could credibly
be obtained with the amount of money given to subjects as an endowment at the beginning of
the experiment. Since the item was perishable and had nearly universal appeal, it was more likely
to maximize the number of subjects reporting a positive valuation, thus yielding a richer data
set. 15
To reduce the possibility that the subjects might anchor their responses on a numerical cue
from a denominational value on the gift certificates, they were simply labeled “DOZEN
COOKIES ONLY” on the back. By arrangement with the proprietor of the business, this
specially labeled gift certificate was only redeemable for one dozen cookies and could not be used
toward any other purchase. The signature item of the shop is a scoop of ice cream served
between two freshly baked cookies. A dozen cookies may be bought at once and a price appears
for this purchase on the menu, but in practice patrons very rarely make this purchase. Thus
while the establishment and its wares would be known to many of the subjects, it was very
unlikely that any of them would remember the market value for a gift certificate for a dozen
cookies. No subject in any of the sessions inquired about either the value on the gift card or the
price of the good on offer. 16 The gift card was handed directly to the subjects individually at the
same time as the login code and hard copy of the instructions. 17
15 One significant concern in choosing the item was that a subject who had a high value for a low-cost durable item
(say, the traditional school-themed mug or water bottle) would already own one (or more) and thus would not place
very much value on obtaining another, while those who did not already own one lacked one precisely because they
placed very little—if any—value on it.
16 Several weeks after the experimental sessions were completed, the business in question raised the prices of all of its
products, but these gift certificates were still honored and redeemed for one dozen cookies. The author—who retains
many of the certificates not obtained by subjects—has made no attempt to exploit the minor arbitrage opportunity
thereby presented.
17 Unlike the first and second experimental sessions, the set of seats in the Xlab to be used by the subjects during
the third session was predetermined, and one of the gift cards was placed at each of the terminals before the subjects
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