Expert Opinion and the Demand for Experience Goods: An Experimental Approach in the Retail Wine Market
AbstractThe effect of expert opinion on demand for experience goods is difficult to quantify, as the relationship between purchases and reviews may be driven by product quality. Further, it is unclear whether a review-based demand effect is due to providing quality or existence information. Utilizing a retail field experiment to overcome these obstacles, we find a significant positive average consumer response to expert opinion labels for wine. Demand decreases for low scoring wines and demand increases for wines scoring average or higher. Results indicate that expert opinion labels transmit quality information as opposed to solely shelf visibility.
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Bibliographic InfoPaper provided by Department of Agricultural & Resource Economics, UC Berkeley in its series Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series with number qt4nc7h417.
Date of creation: 26 May 2011
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Social and Behavioral Sciences; Life Sciences; Business; experimental methods; consumer behavior; wine industry;
Other versions of this item:
- James Hilger & Greg Rafert & Sofia Villas-Boas, 2011. "Expert Opinion and the Demand for Experience Goods: An Experimental Approach in the Retail Wine Market," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1289-1296, November.
- Hilger, James & Rafert, Greg & Villas-Boas, Sofia B, 2009. "Expert Opinion and the Demand for Experience Goods : an experimental approach in the retail wine market," CUDARE Working Paper Series 1049, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
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