Abstract
A yes-response function in a contingent valuation study is said to have fat tails if it has a high and slowly declining yes-response rate at high bid levels. Truncated bids refer to the practice of dropping high bid offers before a yes-response rate of near zero is reached. This is a common practice in contingent valuation. We explore the extent and implications of fat tails and truncated bids in a study of an endangered shorebird species. We find, among other things, that mean willingness to pay is quite sensitive to the highest bid offered – so much so that the choice of highest bid nearly dictates outcomes.
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