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The Power of Apology

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Author Info

  • Johannes Abeler

    ()
    (University of Nottingham)

  • Juljana Calaki

    (University of Bonn)

  • Kai Andree

    (University of Potsdam)

  • Christoph Basek

    (University of Bonn)

Abstract

After an unsatisfactory purchase, many firms are quick to apologize to customers. It is, however, not clear why they should do that. As the apology is costless, it should be regarded as cheap talk and thus ignored by the customer. In this paper, we test in a controlled field experiment whether apologizing inuences customers' subsequent behavior. We find that apologizing yields much better outcomes for the firm than offering a monetary compensation.

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File URL: http://www.nottingham.ac.uk/cedex/documents/papers/2009-12.pdf
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Bibliographic Info

Paper provided by The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham in its series Discussion Papers with number 2009-12.

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Date of creation: Jun 2009
Date of revision:
Handle: RePEc:cdx:dpaper:2009-12

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Related research

Keywords: Apology; Credulity; Natural Field Experiment;

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References

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  1. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
  2. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough Or Don'T Pay At All," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 791-810, August.
  3. 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.
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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. Urs Fischbacher & Verena Utikal, 2010. "On the Acceptance of Apologies," TWI Research Paper Series 53, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  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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