Explaining differences in real and hypothetical experimental auctions and choice experiments with personality

Literature is replete with examples of hypothetical bias but little is known about the cause of discrepancies. We investigate how consumers’ personalities influence behavior in real and hypothetical choice experiments and auctions. Results show that personality plays a larger role in explaining behavior in choice experiments than in auctions. Agency, neuroticism, and conscientiousness are the least relevant personality traits influencing bidding behavior while agreeableness and neuroticism are the least relevant traits influencing choice behavior. The trait with the strongest positive effect in auctions is extraversion, while agency matters the most in choice experiments. Certain personalities behave differently in real and hypothetical environments, suggesting that personality could explain a significant portion of hypothetical bias. This indicates that market outcomes may be influenced by the types of people participating in the market and the way they interact with the market structure based on their underlying personality.