The Effect of Learning and Fatigue on Preferences and WTP in a ...

individual’s choices can be internally coherent, but at the same time they can be anchored on the
first choice or some initial starting point.
Our results suggest that a learning effect is present. This is observed through a reduction in the error
variance for the last 8 CS relative to the first 8 CS. Moreover the results show that the overall
preference structure differs between the two sequences <strong>of</strong> choice sets, <strong>and</strong> further analysis showed
that the WTP estimates were affected to some degree. We find not evidence <strong>of</strong> fatigue effects in the
applied sequence <strong>of</strong> 16 CS. While our results imply that learning effects can indeed be <strong>of</strong> significant
structural importance when conducting CE surveys, our results also underline that if focus is solely
on obtaining policy advice in terms <strong>of</strong> WTP estimates, learning effects are not negligible.
<strong>The</strong> paper is organized as follows. <strong>The</strong> following section provides an overview <strong>of</strong> the existing
literature dealing with learning <strong>and</strong> fatigue effects in CE. Section 3 briefly describes the method
used in the survey <strong>and</strong> the theory behind the method. In section 4 the design <strong>of</strong> the survey <strong>and</strong> the
data are described, followed by presentation <strong>of</strong> the results in section 5. Finally we discuss <strong>and</strong>
conclude in section 6.
2. Existing evidence <strong>of</strong> learning <strong>and</strong> fatigue effects in CE
In a split sample CE study, Ladenburg & Olsen (2008) find evidence <strong>of</strong> starting point bias, but the
impact <strong>of</strong> this anomaly decays as more choice sets are evaluated. <strong>The</strong>y conclude that a learning
effect effectively reduces the bias. This is clearly in accordance with the DPH. Previous studies
concerning the DPH interpretation <strong>of</strong> decaying anomalies have found similar results. In a literature
review, Braga & Starmer (2005) find some, though not unequivocal, support for the DPH. Cherry et
al. (2003) <strong>and</strong> List (2003) find that people generally become more rational through refining values,
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