Question

Anchoring at a specific start point is one of the drawbacks of ranking tasks. True False Question 15 2 pts The BDM mechanism is by design an incentive compatible mechanism (i.e., subjects have an incentive to reveal their true preferences in this mechanism) True O False D Question 16 2 pts Including a "no product" option in a choice experiment is optional and not necessary (i.e. the same preferences will be elicited whether the "no product" option is included or not). True False

Answer 1

Yes, this is true that in anchoring starting from an initial point is a major drawback because if we start from an initial point we make adjustments to the initial point to yield a result.

These adjustments that we make often yield other result if the adjustments are made from another point of start.

Yes, this is true that the BDM mechanism is incentive compatible because in case of BDM the subjects are allowed to show their willingness to pay and then the random price is drawn and if in case the random price that has been drawn is above the Bid price than the subject get the goods at the bid price.

Yes, this is true because the subject can show their willingness to pay.