[Limdep Nlogit List] Problems implementing Herriges and Shogren anchoring approach

[William Greene]

Oliver.
The logminus error would have been caused by some other problem.
But, you do not have to "restrict" two parameters to be equal in
your function. Just use the same name (gamma) in both places. The
same parameter will be used and the equality will be imposed by
construction.
/Bill Greene

----- Original Message -----
From: "Oliver Frör" <froer at uni-hohenheim.de>
To: limdep at limdep.itls.usyd.edu.au
Sent: Tuesday, April 14, 2009 5:11:52 AM GMT -05:00 Columbia
Subject: [Limdep Nlogit List] Problems implementing Herriges and Shogren anchoring approach

Hello,
 
in the context of estimating willingness-to-pay using double-bounded
dichotomous choice data I am trying to implement the anchoring model by
Herriges and Shogren (1996) where the response to the follow-up bid is based
on an anchoring-adjusted WTP function WTP2= (1-gamma)*WTP1 + gamma*bid1. For
the estimation in LIMDEP I am using the MAXIMIZE command where three
different probability functions for the response to the first bid, the high
and the low follow-up bid are specified for the Log-likelihood function,
either in a probit or logit form.
I had trouble specifying the probabilities for the follow-up questions
correctly since "gamma" enters the function twice. For the estimation I
tried to use two different labels f1 (as a parameter for WTP1) and f2
(parameter for bid1) and restrict f2 to equal (1-f1). However, the
respective restriction option "; Rst" did not seem to work and on top I
receive an error message (Logminus). Is this the correct approach? Do you
have any alternative approaches I could try? I would be grateful for any
help in this case.
 
The full citation of the approach is: Herriges, J.A., Shogren, J.F. (1996):
Starting Point Bias in Dichotomous Choice Valuation wit Follow-Up
Questioning. Journal of Environmental Economics and Management 30, 112-131.
 
Thanks and regards,
 
Oliver Froer
 
University of Hohenheim, Germany
froer at uni-hohenheim.de
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