aleximas.substack.com/p/what-will-be-scarce
1 correction found
In our experiments, willingness to pay roughly doubled when subjects learned that a random subset of people would be excluded from the product
The linked study does not report willingness to pay as “roughly doubled” in that experiment. It reports a nearly 50% increase; only the median, not overall willingness to pay, is described as doubling in a different comparison.
Full reasoning
The paper the article cites for this claim reports a much smaller effect size for the experiment described here.
In the study’s description of the basic-exchange experiment, Imas and Madarász write that random exclusion led to “a nearly 50% increase in willingness to pay” among those who remained eligible to buy. That contradicts the article’s statement that willingness to pay “roughly doubled.”
The paper does mention doubling for a median measure in another context, but that is not the same as saying willingness to pay overall roughly doubled in this experiment. So the article overstates the magnitude of the result.
2 sources
- Superiority-Seeking and the Preference for Exclusion | The Review of Economic Studies | Oxford Academic
Four experimental studies test the predictions of the model... In the Random Exclusion treatment... Despite its transparent nature, exclusion led to a nearly 50% increase in willingness to pay amongst those who retained this opportunity.
- Superiority-Seeking and the Preference for Exclusion (Review of Economic Studies PDF)
In the Random Exclusion treatment, the experimenter publicly announced that a subset of people would be randomly barred from the opportunity to purchase the good... Despite its transparent nature, exclusion led to a nearly 50% increase in willingness to pay amongst those who retained this opportunity.