IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

The effect of olfactory sensory cues on economic decision making

Listed author(s):
  • Kechagia, Varvara
  • Drichoutis, Andreas C.

Several studies show that sensory cues influence consumer decision making processes. While scent is a key component of a market's physical environment, it has received far less attention in the academic literature as compared, for example, with visual cues. In addition, most of the studies that examine the effect of ambient scents fail on one or both of these criteria: to properly control the influence of nuisance factors and/or to elicit preferences under real monetary incentives. We collected data from a laboratory experiment where we varied on a between subjects basis the dispersion of a citrus fragrance. We then elicited subjects' willingness to pay for two unbranded products - a mug and a chocolate - by having subjects participate in a 2nd price Vickrey auction. We also elicited subjects' risk preferences using lottery choice tasks. Our results show a statistically and economically significant effect on subjects' willingness to pay: valuations increased between 37% - 43% for subjects who were exposed to a citrus scent as compared to the control group. We do not find a statistically significant effect of the citrus scent on subjects' risk aversion.

If 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.

File URL: https://mpra.ub.uni-muenchen.de/75293/1/MPRA_paper_75293.pdf
File Function: original version
Download Restriction: no

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 75293.

as
in new window

Length:
Date of creation: 10 Oct 2016
Handle: RePEc:pra:mprapa:75293
Contact details of provider: Postal:
Ludwigstraße 33, D-80539 Munich, Germany

Phone: +49-(0)89-2180-2459
Fax: +49-(0)89-2180-992459
Web page: https://mpra.ub.uni-muenchen.de

More information through EDIRC

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.:

as
in new window


  1. Shogren, Jason F. & Margolis, Michael & Koo, Cannon & List, John A., 2001. "A random nth-price auction," Journal of Economic Behavior & Organization, Elsevier, vol. 46(4), pages 409-421, December.
  2. Spangenberg, Eric R. & Sprott, David E. & Grohmann, Bianca & Tracy, Daniel L., 2006. "Gender-congruent ambient scent influences on approach and avoidance behaviors in a retail store," Journal of Business Research, Elsevier, vol. 59(12), pages 1281-1287, November.
  3. Jay R. Corrigan & Andreas C. Drichoutis & Jayson L. Lusk & Rodolfo M. Nayga & Matthew C. Rousu, 2012. "Repeated Rounds with Price Feedback in Experimental Auction Valuation: An Adversarial Collaboration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 97-115.
  4. Glenn W. Harrison & Jia Min Ng, 2016. "Evaluating The Expected Welfare Gain From Insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 83(1), pages 91-120, 01.
  5. John Hey, 2014. "My experimental meanderings," Theory and Decision, Springer, vol. 77(3), pages 291-295, October.
  6. John Hey, 2005. "Why We Should Not Be Silent About Noise," Experimental Economics, Springer;Economic Science Association, vol. 8(4), pages 325-345, December.
  7. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
  8. Mitchell, Deborah J & Kahn, Barbara E & Knasko, Susan C, 1995. " There's Something in the Air: Effects of Congruent or Incongruent Ambient Odor on Consumer Decision Making," Journal of Consumer Research, Oxford University Press, vol. 22(2), pages 229-238, September.
  9. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-333, March.
  10. Wilcox, Nathaniel T., 2011. "'Stochastically more risk averse:' A contextual theory of stochastic discrete choice under risk," Journal of Econometrics, Elsevier, vol. 162(1), pages 89-104, May.
  11. Kevin A. Clarke, 2003. "Nonparametric Model Discrimination in International Relations," Journal of Conflict Resolution, Peace Science Society (International), vol. 47(1), pages 72-93, February.
  12. James Cox & Vjollca Sadiraj & Ulrich Schmidt, 2015. "Paradoxes and mechanisms for choice under risk," Experimental Economics, Springer;Economic Science Association, vol. 18(2), pages 215-250, June.
  13. Kevin Bradford & Debra Desrochers, 2009. "The Use of Scents to Influence Consumers: The Sense of Using Scents to Make Cents," Journal of Business Ethics, Springer, vol. 90(2), pages 141-153, November.
  14. Jacquemet, Nicolas & Joule, Robert-Vincent & Luchini, Stéphane & Shogren, Jason F., 2009. "Earned wealth, engaged bidders? Evidence from a second-price auction," Economics Letters, Elsevier, vol. 105(1), pages 36-38, October.
  15. Quiggin, John, 1982. "A theory of anticipated utility," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 323-343, December.
  16. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
  17. Morrin, Maureen & Ratneshwar, S., 2000. "The Impact of Ambient Scent on Evaluation, Attention, and Memory for Familiar and Unfamiliar Brands," Journal of Business Research, Elsevier, vol. 49(2), pages 157-165, August.
  18. Nicolas Guéguen & Christine Petr, 2006. "Odors and consumer behavior in arestaurant," Post-Print halshs-00094108, HAL.
  19. John Hey & Gianna Lotito & Anna Maffioletti, 2010. "The descriptive and predictive adequacy of theories of decision making under uncertainty/ambiguity," Journal of Risk and Uncertainty, Springer, vol. 41(2), pages 81-111, October.
  20. Nathaniel T. Wilcox, 2015. "Error and Generalization in Discrete Choice Under Risk," Working Papers 15-11, Chapman University, Economic Science Institute.
  21. Lattimore, Pamela K. & Baker, Joanna R. & Witte, Ann D., 1992. "The influence of probability on risky choice: A parametric examination," Journal of Economic Behavior & Organization, Elsevier, vol. 17(3), pages 377-400, May.
  22. Busemeyer, Jerome R. & Townsend, James T., 1992. "Fundamental derivations from decision field theory," Mathematical Social Sciences, Elsevier, vol. 23(3), pages 255-282, June.
  23. Drazen Prelec, 1998. "The Probability Weighting Function," Econometrica, Econometric Society, vol. 66(3), pages 497-528, May.
  24. Pamela K. Lattimore & Joanna R. Baker & A. Dryden Witte, 1992. "The Influence Of Probability on Risky Choice: A parametric Examination," NBER Technical Working Papers 0081, National Bureau of Economic Research, Inc.
  25. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, 03.
  26. Chebat, Jean-Charles & Michon, Richard, 2003. "Impact of ambient odors on mall shoppers' emotions, cognition, and spending: A test of competitive causal theories," Journal of Business Research, Elsevier, vol. 56(7), pages 529-539, July.
  27. Michon, Richard & Chebat, Jean-Charles & Turley, L. W., 2005. "Mall atmospherics: the interaction effects of the mall environment on shopping behavior," Journal of Business Research, Elsevier, vol. 58(5), pages 576-583, May.
  28. Morrison, Michael & Gan, Sarah & Dubelaar, Chris & Oppewal, Harmen, 2011. "In-store music and aroma influences on shopper behavior and satisfaction," Journal of Business Research, Elsevier, vol. 64(6), pages 558-564, June.
  29. Bailey Norwood & Matthew C. Roberts & Jayson L. Lusk, 2004. "Ranking Crop Yield Models Using Out-of-Sample Likelihood Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 1032-1043.
  30. repec:hal:journl:halshs-00429894 is not listed on IDEAS
  31. Holt, Charles A, 1986. "Preference Reversals and the Independence Axiom," American Economic Review, American Economic Association, vol. 76(3), pages 508-515, June.
  32. John Hey & Wenting Zhou, 2014. "Do past decisions influence future decisions?," Applied Economics Letters, Taylor & Francis Journals, vol. 21(3), pages 152-157, February.
  33. Glenn Harrison & J. Swarthout, 2014. "Experimental payment protocols and the Bipolar Behaviorist," Theory and Decision, Springer, vol. 77(3), pages 423-438, October.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:75293. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.