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The impact of information on wine auction prices: results of an experiment

Author

Listed:
  • Sebastien Lecocq
  • Thierry Magnac
  • Marie-Claude Pichery
  • Michael Visser

    ()

Abstract

This paper reports the results of an experimental wine auction. Participants of the experiment were randomly assigned to three rooms. In each room four wines had to be evaluated, but the level of information to which participants had access differed across rooms. After the evaluations, the wines were sold sequentially, by four separate Vickrey auctions with secret reservation prices. We find that certain socio-economic characteristics such as gender, income and consumption habits, have a significant impact on the willingness to pay for wine, while others such as age and nationality, do not. We also find that once individuals have read the label characteristics and extracts from wine guides, the taste of the wines does not have an additional impact on willingness to pay. Conversely, if individuals who have only tasted the wines blindly are informed about the wine characteristics and opinions from experts, their willingness to pay increases substantially.

Suggested Citation

  • Sebastien Lecocq & Thierry Magnac & Marie-Claude Pichery & Michael Visser, 2004. "The impact of information on wine auction prices: results of an experiment," Research Unit Working Papers 0401, Laboratoire d'Economie Appliquee, INRA.
  • Handle: RePEc:lea:leawpi:0401
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    File URL: http://www.inra.fr/Internet/Departements/ESR/UR/lea/documents/wp/wp0401.pdf
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    Cited by:

    1. Boom, Anette, 2004. ""Download for Free": When do providers of digital goods offer free samples?," Discussion Papers 2004/28, Free University Berlin, School of Business & Economics.
    2. Todd M. Schmit & Bradley J. Rickard & John Taber, 2013. "Consumer Valuation of Environmentally Friendly Production Practices in Wines, considering Asymmetric Information and Sensory Effects," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(2), pages 483-504, June.
    3. Andreas C. Drichoutis & Stathis Klonaris & Georgia Papoutsi, 2016. "Do good things come in small packages? Willingness to pay for pomegranate wine and bottle size effects," Working Papers 2016-2, Agricultural University of Athens, Department Of Agricultural Economics.

    More about this item

    Keywords

    Auction; Field experiment; Information; Willingness to pay; Wine price.;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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