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Acknowledgments: The authors would like to thank Sylvia Stephen for help in creating recipes for lasagnes and the cooks at the Human Nutrition Unit at The Rowett Institute for preparing them. Thanks go to Professor Mandy Ryan for her comments on an early version of the manuscript. The authors have no conflict of interest to disclose. Funding: this study was funded by the Scottish Government's Rural and Environment Science and Analytical Services Division (RESAS). ; Peer reviewed ; Postprint

AbstractThis paper explores bidding behaviour under risk and uncertainty using the Becker-DeGroot-Marschak mechanism (BDM) and second price auction (SPA). It investigates whether values elicited via the two mechanisms are consistent and whether bidding behaviour can be influenced by differences in the number and type of sources of risk and uncertainty that people face when exposed to the two mechanisms. In our experiment, subjects are exposed to non-monetary lotteries where they bid for a high-quality seafood product, but there is a chance (known or unknown) that they receive a lower quality seafood product instead. Results indicate that bidding behaviour can be influenced by the number and type of sources of risk and uncertainty that subjects face and subjects' bidding behaviour is only consistent with standard theories of decision making under risk and uncertainty when they bid on a risky product in the SPA. Despite this, BDM and SPA elicit equal values under risk and uncertainty in this study.