European Consumers' Willingness to Pay for U.S. Beef in Experimental Auction Markets

Abstract

Consumers' willingness to pay for Irish, Norwegian, U.S. hormone‐free, and U.S. hormone‐treated beef was studied in an experimental auction market. We ran four simultaneous second‐price auctions to elicit efficiently the complete distribution of willingness to pay differences among our four alternatives. Most participants preferred domestic to imported beef, and half the participants preferred Irish to U.S. hormone‐free beef. Hormone‐treated beef received the lowest mean bid, but 28% of the participants were indifferent or preferred U.S. hormone‐treated to U.S. hormone‐free beef.