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Is Cheap Talk Effective at Eliminating Hypothetical Bias in a Provision Point Mechanism

Is Cheap Talk Effective at Eliminating Hypothetical Bias in a Provision Point Mechanism 2025

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The document investigates the effectiveness of 'cheap talk' in eliminating hypothetical bias within a provision point mechanism for voluntary contributions. It highlights that while cheap talk can reduce hypothetical bias, its effectiveness is primarily observed at higher payment levels. The study confirms the existence of hypothetical bias and suggests that different contexts and payment amounts influence the success of cheap talk in eliciting true willingness to pay.

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