When Does the Price Affect the Taste? Results from a Wine Experiment
AbstractWe 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 supports the notion 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 concerning wine.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 717.
Length: 16 pages
Date of creation: 19 Apr 2009
Date of revision: 20 Apr 2009
Contact details of provider:
Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Phone: +46-(0)8-736 90 00
Fax: +46-(0)8-31 01 57
Web page: http://www.hhs.se/
More information through EDIRC
Price-Quality Heuristic; Attribute Information; Role of Expectations; Marketing; Blind Tasting; Wine.;
Other versions of this item:
- Almenberg, Johan & Dreber, Anna, 2009. "When Does The Price Affect The Taste? Results From A Wine Experiment," Working Papers 51755, American Association of Wine Economists.
- 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
This paper has been announced in the following NEP Reports:
- NEP-AGR-2009-04-25 (Agricultural Economics)
- NEP-ALL-2009-04-25 (All new papers)
- NEP-CBE-2009-04-25 (Cognitive & Behavioural Economics)
- NEP-CUL-2009-04-25 (Cultural Economics)
- NEP-EXP-2009-04-25 (Experimental Economics)
- NEP-MKT-2009-04-25 (Marketing)
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.:
- 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.
- 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 Papers 37328, American Association of Wine Economists.
- Ellingsen, Tore & Johannesson, Magnus, 2006.
"Pride and Prejudice: The Human Side of Incentive Theory,"
CEPR Discussion Papers
5768, C.E.P.R. Discussion Papers.
- 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.
- von Essen, Emma & Ranehill, Eva, 2011.
"Dominance and Submission: Social Status Biases Economic Sanctions,"
Working Paper Series in Economics and Finance
732, Stockholm School of Economics, revised 08 Feb 2011.
- von Essen, Emma & Ranehill, Eva, 2011. "Dominance and Submission: Social Status Biases Economic Sanctions," Research Papers in Economics 2011:1, Stockholm University, Department of Economics, revised Feb 2011.
- 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.
- Hoch, Stephen J & Ha, Young-Won, 1986. " Consumer Learning: Advertising and the Ambiguity of Product Experience," Journal of Consumer Research, University of Chicago Press, vol. 13(2), pages 221-33, September.
- Gerard J. Tellis & Birger Wernerfelt, 1987. "Competitive Price and Quality Under Asymmetric Information," Marketing Science, INFORMS, vol. 6(3), pages 240-253.
- 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, University of Chicago Press, vol. 15(3), pages 374-78, December.
- Rössel, Jörg & Beckert, Jens, 2012. "Quality classifications in competition: Price formation in the German wine market," MPIfG Discussion Paper 12/3, Max Planck Institute for the Study of Societies.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Helena Lundin).
If references are entirely missing, you can add them using this form.