Choice experiments are widely used in private and public domains to study consumer preferences. The incentive properties in the two settings differ, with significant implications for their application in the latter setting. In public good decisions it may make sense for a consumer to choose his or her second best option if it is considered more likely to be chosen over the third option than their first best option. Such strategic choice behavior is shown to occur in certain types of voting games, such as multi-candidate elections (McKelvey and Ordeshook 1972; Gibbard 1973; Satterthwaite 1975).

We use an induced preference economic experiment to explore these incentives and show that, in particular, the repeated multiple choice format is vulnerable to rational strategic choice of the second best option which is often the status-quo. This is due to the combined effect of the theoretical incentive properties to choose the second best and our use in the experiment of generic full factorial designs where under realistic assumptions we show that the status quo can dominate first and second best choices.

Keywords: Non-strategy proof mechanisms, choice experiment, public goods, experimental economics, status quo bias