The Power of Apology
AbstractAfter 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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Bibliographic InfoPaper 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.
Date of creation: Jun 2009
Date of revision:
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Postal: School of Economics University of Nottingham University Park Nottingham NG7 2RD
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More information through EDIRC
Apology; Credulity; Natural Field Experiment;
Other versions of this item:
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
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.:
- Uri Gneezy & Aldo Rustichini, 2000.
"Pay Enough Or Don'T Pay At All,"
The Quarterly Journal of Economics,
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- Verena Utikal, 2013. "I am sorry - Honest and Fake Apologies," Working Paper Series of the Department of Economics, University of Konstanz 2013-18, Department of Economics, University of Konstanz.
- 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.
- Verena Utikal, 2013. "I am sorry - Honest and fake apologies," TWI Research Paper Series 81, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
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