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Expert Opinion and the Demand for Experience Goods: An Experimental Approach

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  • Hilger, James
  • Rafert, Greg
  • Villas-Boas, Sofia Berto

Abstract

There exist two significant obstacles to analyzing the effect of expert opinion on consumer demand for experience goods: (1) the relationship between good reviews and high product demand may be spurious and driven by high product quality, and (2) even if expert opinion increases consumer demand, it is unclear whether it does so by providing quality information or by alerting consumers to the existence of a particular product. We utilize an experimental approach in a retail grocery chain in which we display expert opinion information for a group of randomly selected wines to overcome these obstacles. We find that although there is no overall consumer response to expert opinion provision, a subset of highly reviewed wines experienced an increase in demand. Results indicate that consumers utilize quality information provided by expert opinion labels, as opposed to solely using the label to learn of a wine's existence.

Suggested Citation

  • Hilger, James & Rafert, Greg & Villas-Boas, Sofia Berto, 2007. "Expert Opinion and the Demand for Experience Goods: An Experimental Approach," CUDARE Working Papers 6055, University of California, Berkeley, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:ucbecw:6055
    DOI: 10.22004/ag.econ.6055
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    References listed on IDEAS

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