Can incentive-compatibility reduce hypothetical bias in smokers’ experimental choice behavior? A randomized discrete choice experiment

Discrete choice experiments (DCEs) are used to provide evidence for policymaking and nonmarket valuation in health. A perennial issue with the stated preference data used in DCEs is hypothetical bias; that is, hypothetical responses in experiments may differ from real-world behavior. A randomized DCE tested whether an incentive-compatible preference elicitation reduced hypothetical bias. Adult smokers were randomly assigned to either an incentive-compatible arm or a control arm; and then made DCE choices among cigarettes, e-cigarettes, and an opt-out. We examined the impacts on product choices, willingness to pay, and the scale of utility. Scale and willingness to pay were unaffected by the incentive. Respondents in the incentive-compatible arm were more likely to choose e-cigarettes. That is, the incentive-compatible approach affected product choices rather than scale/attribute preferences. Thus, while it is feasible to use incentive-compatibility mechanisms to manipulate experimental behaviors, the approach did not induce the hypothesized effect on preferences in this setting.