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Buying without using -- biases of German BahnCard buyers

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  • H. Schmale
  • T. Ehrmann
  • A. Dilger

Abstract

We use a large data set of German railway travellers to analyse the purchasing decision for fare-reducing BahnCards. We expect that this tariff choice is neither completely rational nor irrational, but bounded-rational in a meaningful way. Actually we predict a flat-rate bias, i.e. an under-use of their BahnCards by many customers. However, we estimate that this bias is not too large. The empirical results approve our hypotheses for the most part, especially for the more expensive BahnCard50 (BC50), whereas the under-use of the cheaper BahnCard25 (BC25) is so extensive that it is not worthwhile on average.

Suggested Citation

  • H. Schmale & T. Ehrmann & A. Dilger, 2013. "Buying without using -- biases of German BahnCard buyers," Applied Economics, Taylor & Francis Journals, vol. 45(7), pages 933-941, March.
  • Handle: RePEc:taf:applec:45:y:2013:i:7:p:933-941
    DOI: 10.1080/00036846.2011.613781
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    References listed on IDEAS

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    Cited by:

    1. Piening, J. & Ehrmann, T. & Meiseberg, B., 2013. "Competing risks for train tickets – An empirical investigation of customer behavior and performance in the railway industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 51(C), pages 1-16.
    2. Voss, Achim, 2015. "Collective public-transport tickets and anticipated majority choice: A model of student tickets," Transportation Research Part A: Policy and Practice, Elsevier, vol. 80(C), pages 263-276.

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