Question

6. An experimenter performs a double bounded contingent valuation, where the first question asks the subject whether she would be willing to pay $5 for the product. Having answered no, the second question asks whether she would be willing to pay $6 for the product. Evaluate this design. Specifically, state whether it is a good or bad design and why.

Answer 1

The design was bad design because of the following reason:

1)First question asked was whether the subject willing to pay $5 rupees and the answer is 'NO'. So the subject is willingness to pay(WTP) falls between $0 and $5(excluding).So the next question should be whether the subject willingness to pay anything below $5( i.e., $1,$2,$3,$4 ) but the question asked was whether the subject is willingness to pay $6 which is greater than $5. The subject is not willingness to pay $5 how he can pay more than that that is $6 .So the next question asked was wrong it should be anything below $5. So the design is a bad design.