AbstractThis thesis explores consumers’ purchasing behaviour under risk and uncertainty. Specifically, the role of subjective beliefs, risk and ambiguity attitudes, and information. I focus on food purchasing decisions with uncertainty about the quality generated by food fraud.
The first essay uses an artefactual field experiment to explore bidding behaviour under risk and uncertainty in homegrown value (HGV) and induced value (IV) settings using Becker-DeGroot-Marschak mechanism (BDM) and second price Vickrey auctions (SPVA). It investigates if deviations from theoretical predications can be ascribed to bidding behaviour that is inconsistent with standard theories of decision making (i.e. Expected Utility Theory and Subjective Expected Utility Theory). In the HGV setting, non-monetary lotteries are used. Participants bid for a high-quality seafood product, but there is a chance (known or unknown) they receive a lower quality seafood product.
The second essay uses the artefactual field experiment to explore consumers’ willingness to pay (WTP) a price premium to avoid food fraud. The influence of subjective probabilities, risk and ambiguity preferences on premiums are also investigated. Results show that consumers are willing to pay a price premium to avoid food fraud and purchase a fully authentic PDO fish product.
The third essay explores if consumers update their beliefs on food authenticity and their preferences for potentially fraudulent food after receiving information. Whether consumers are Bayesian updaters and if belief updating is correlated to a shift in their WTP is tested. I examine if changes in beliefs and WTP depend on whether news is perceived as good or bad and on the source of information. An online survey is split into two groups: one receiving information about food authenticity from other consumers, the second from experts.
|Date of Award||Jul 2021|
|Sponsors||Northern Ireland Department for the Economy|
|Supervisor||George Hutchinson (Supervisor) & Simone Cerroni (Supervisor)|
- subjective beliefs
- food fraud
- second price Vickrey auctions
- experimental auctions
- food authenticity
- Becker-DeGroot-Marschak mechanism
- willingness to pay
- belief updating
- Bayesian updating