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When Does the Price Affect the Taste? Results from a Wine Experiment

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Author Info
Almenberg, Johan () (Dept. of Economics, Stockholm School of Economics)
Dreber, Anna () (Dept. of Economics, Stockholm School of Economics)

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Abstract

We designed an experiment that examines how knowledge about the price of a good, and the time at which the information is received, affects how the good is experienced. The good in question was wine, and the price was either high or low. Our results suggest that hosts offering wine to guests can safely reveal the price: much is gained if the wine is expensive, and little is lost if it is cheap. Disclosing the high price before tasting the wine produces considerably higher ratings, although only from women. Disclosing the low price, by contrast, does not result in lower ratings. Our finding indicates that price not only serves to clear markets, it also serves as a marketing tool; it influences expectations that in turn shape a consumer’s experience. In addition, our results suggest that men and women respond differently to attribute information.

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Publisher Info
Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 717.

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Length: 13 pages
Date of creation: 19 Apr 2009
Date of revision: 20 Apr 2009
Handle: RePEc:hhs:hastef:0717

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Related research
Keywords: Price-Quality Heuristic; Attribute Information; Role of Expectations; Marketing; Blind Tasting; Wine.;

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Find related papers by JEL classification:
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hoch, Stephen J & Ha, Young-Won, 1986. " Consumer Learning: Advertising and the Ambiguity of Product Experience," Journal of Consumer Research: An Interdisciplinary Quarterly, University of Chicago Press, vol. 13(2), pages 221-33, September.
  2. Goldstein, Robin & Almenberg, Johan & Dreber, Anna & Emerson, John W. & Herschkowitsch, Alexis & Katz, Jacob, 2008. "Do More Expensive Wines Taste Better? Evidence from a Large Sample of Blind Tastings," Working Paper Series in Economics and Finance 700, Stockholm School of Economics, revised 24 Apr 2008. [Downloadable!]
    Other versions:
  3. Frank, Robert H, 1985. "The Demand for Unobservable and Other Nonpositional Goods," American Economic Review, American Economic Association, vol. 75(1), pages 101-16, March. [Downloadable!] (restricted)
  4. Tore Ellingsen & Magnus Johannesson, 2008. "Pride and Prejudice: The Human Side of Incentive Theory," American Economic Review, American Economic Association, vol. 98(3), pages 990-1008, June. [Downloadable!]
    Other versions:
  5. Levin, Irwin P & Gaeth, Gary J, 1988. " How Consumers Are Affected by the Framing of Attribute Information before and after Consuming the Product," Journal of Consumer Research: An Interdisciplinary Quarterly, University of Chicago Press, vol. 15(3), pages 374-78, December.
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