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The power of apology

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Author Info

  • Abeler, Johannes
  • Calaki, Juljana
  • Andree, Kai
  • Basek, Christoph

Abstract

How should firms react to customer complaints after an unsatisfactory purchase? In a field experiment, we test the effect of different reactions and find that a cheap-talk apology yields significantly better outcomes for the firm than offering a monetary compensation.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 107 (2010)
Issue (Month): 2 (May)
Pages: 233-235

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Handle: RePEc:eee:ecolet:v:107:y:2010:i:2:p:233-235

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Web page: http://www.elsevier.com/locate/ecolet

Related research

Keywords: Apology Credulity Reputation systems Natural field experiment;

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References

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  1. Patrick Bajari & Ali Horta�su, 2004. "Economic Insights from Internet Auctions," Journal of Economic Literature, American Economic Association, vol. 42(2), pages 457-486, June.
  2. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
  3. Gneezy, U. & Rustichini, A., 1998. "Pay Enough - Or Don't Pay at All," Discussion Paper 1998-57, Tilburg University, Center for Economic Research.
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Citations

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Cited by:
  1. Verena Utikal, 2013. "I am sorry - Honest and fake apologies," TWI Research Paper Series 81, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  2. Fischbacher, Urs & Utikal, Verena, 2013. "On the acceptance of apologies," Games and Economic Behavior, Elsevier, vol. 82(C), pages 592-608.
  3. Luis Cabral & Lingfang (Ivy) Li, 2012. "A Dollar for Your Thoughts: Feedback-Conditional Rebates on eBay," Working Papers 12-13, New York University, Leonard N. Stern School of Business, Department of Economics.

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