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The power of apology

Author Info

  • Abeler, Johannes
  • Calaki, Juljana
  • Andree, Kai
  • Basek, Christoph

Abstract

How should firms react to customer complaints after an unsatisfactory purchase? In a field experiment, we test the effect of different reactions and find that a cheap-talk apology yields significantly better outcomes for the firm than offering a monetary compensation.

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File URL: http://www.sciencedirect.com/science/article/pii/S0165-1765(10)00034-0
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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 107 (2010)
Issue (Month): 2 (May)
Pages: 233-235

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Handle: RePEc:eee:ecolet:v:107:y:2010:i:2:p:233-235
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

Keywords: Apology Credulity Reputation systems Natural field experiment;

Other versions of this item:

  • Johannes Abeler & Juljana Calaki & Kai Andree & Christoph Basek, 2009. "The Power of Apology," Discussion Papers 2009-12, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  • Johannes Abeler & Juljana Calaki & Kai Andree & Christoph Basek, 2009. "The Power of Apology," Discussion Papers 2009-12, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
Find related papers by JEL classification:
  • 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

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.:

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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. Patrick Bajari & Ali Hortaçsu, 2004. "Economic Insights from Internet Auctions," Journal of Economic Literature, American Economic Association, vol. 42(2), pages 457-486, June.
  3. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough or Don't Pay at All," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 791-810.
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Cited by:

  1. Urs Fischbacher & Verena Utikal, 2010. "On the Acceptance of Apologies," TWI Research Paper Series 53, Thurgauer Wirtschaftsinstitut, Universit�t Konstanz.
  2. Benjamin Ho, 2012. "Apologies as Signals: With Evidence from a Trust Game," Management Science, INFORMS, vol. 58(1), pages 141-158, January.
  3. Srivastava, Vatsalya, 2016. "The Sorry Clause," Discussion Paper 2016-004, Tilburg University, Tilburg Law and Economic Center.
  4. Verena Utikal, 2013. "I am sorry - Honest and fake apologies," TWI Research Paper Series 81, Thurgauer Wirtschaftsinstitut, Universit�t Konstanz.
  5. Srivastava, Vatsalya, 2016. "The Sorry Clause," Discussion Paper 2016-008, Tilburg University, Center for Economic Research.
  6. 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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