IDEAS home Printed from https://ideas.repec.org/a/taf/applec/45y2013i7p933-941.html
   My bibliography  Save this article

Buying without using -- biases of German BahnCard buyers

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2011.613781
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2011.613781?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Richard H. Thaler, 2008. "Mental Accounting and Consumer Choice," Marketing Science, INFORMS, vol. 27(1), pages 15-25, 01-02.
    2. Evens Salies, 2008. "Mergers in the GB electricity market: effects on retail charges," Applied Economics, Taylor & Francis Journals, vol. 40(11), pages 1483-1490.
    3. R. Preston Mcafee & Hugo M. Mialon & Sue H. Mialon, 2010. "Do Sunk Costs Matter?," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 323-336, April.
    4. Gourville, John T & Soman, Dilip, 1998. "Payment Depreciation: The Behavioral Effects of Temporally Separating Payments from Consumption," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 25(2), pages 160-174, September.
    5. Junyi Shen & Yusuke Sakata & Yoshizo Hashimoto, 2008. "Is individual environmental consciousness one of the determinants in transport mode choice?," Applied Economics, Taylor & Francis Journals, vol. 40(10), pages 1229-1239.
    6. Daniel Van Vuuren & Piet Rietveld, 2002. "The Off-peak Demand for Train Kilometres and Train Tickets: A Microeconometric Analysis," Journal of Transport Economics and Policy, University of Bath, vol. 36(1), pages 49-72, January.
    7. repec:bla:kyklos:v:52:y:1999:i:2:p:219-38 is not listed on IDEAS
    8. Stefano DellaVigna & Ulrike Malmendier, 2006. "Paying Not to Go to the Gym," American Economic Review, American Economic Association, vol. 96(3), pages 694-719, June.
    9. Soman, Dilip, 2001. "Effects of Payment Mechanism on Spending Behavior: The Role of Rehearsal and Immediacy of Payments," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 27(4), pages 460-474, March.
    10. Stefano DellaVigna & Ulrike Malmendier, 2004. "Contract Design and Self-Control: Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(2), pages 353-402.
    11. Eugenio J. Miravete, 2002. "Estimating Demand for Local Telephone Service with Asymmetric Information and Optional Calling Plans," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(4), pages 943-971.
    12. Eugenio J. Miravete, 2003. "Choosing the Wrong Calling Plan? Ignorance and Learning," American Economic Review, American Economic Association, vol. 93(1), pages 297-310, March.
    13. Train, Kenneth E & Ben-Akiva, Moshe & Atherton, Terry, 1989. "Consumption Patterns and Self-selecting Tariffs," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 62-73, February.
    14. Felix FitzRoy & Ian Smith, 1999. "Season Tickets and the Demand for Public Transport," Kyklos, Wiley Blackwell, vol. 52(2), pages 219-238, May.
    15. Kenneth E. Train, 1991. "Optimal Regulation: The Economic Theory of Natural Monopoly," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200848, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fabian Herweg & Konrad Mierendorff, 2013. "Uncertain Demand, Consumer Loss Aversion, And Flat-Rate Tariffs," Journal of the European Economic Association, European Economic Association, vol. 11(2), pages 399-432, April.
    2. Stephen Leider & Özge Şahin, 2014. "Contracts, Biases, and Consumption of Access Services," Management Science, INFORMS, vol. 60(9), pages 2198-2222, September.
    3. Schuster, Emanuel & Spann, Martin, 2024. "Pay today, or delay the pay: Consumer preference for double flat-rate pricing plans," Journal of Business Research, Elsevier, vol. 182(C).
    4. Ariel Casarin, 2014. "Regulated price reforms and unregulated substitutes: the case of residential piped gas in Argentina," Journal of Regulatory Economics, Springer, vol. 45(1), pages 34-56, February.
    5. Shy, Oz, 2008. "Measuring the cost of making payment decisions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2411-2416, December.
    6. Itai Ater & Vardit Landsman, 2013. "Do Customers Learn from Experience? Evidence from Retail Banking," Management Science, INFORMS, vol. 59(9), pages 2019-2035, September.
    7. Koji Ishibashi, 2024. "Biased Beliefs of Consumers and Two-Part Tariff Competition," Keio-IES Discussion Paper Series 2024-009, Institute for Economics Studies, Keio University.
    8. Malmendier, Ulrike M. & Della Vigna, Stefano, 2002. "Overestimating Self-Control: Evidence from the Health Club Industry," Research Papers 1880, Stanford University, Graduate School of Business.
    9. Kim, Jungkeun, 2019. "The impact of different price promotions on customer retention," Journal of Retailing and Consumer Services, Elsevier, vol. 46(C), pages 95-102.
    10. Krämer, Jan & Wiewiorra, Lukas, 2012. "Beyond the flat rate bias: The flexibility effect in tariff choice," Telecommunications Policy, Elsevier, vol. 36(1), pages 29-39.
    11. Priya Jha-Dang, 2006. "A Review of Psychological Research on Consumer Promotions and a New Perspective Based on Mental Accounting," Vision, , vol. 10(3), pages 35-43, July.
    12. Azar, Ofer H., 2014. "Optimal strategy of multi-product retailers with relative thinking and reference prices," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 130-140.
    13. Nicholas Economides & Katja Seim & V. Brian Viard, 2008. "Quantifying the benefits of entry into local phone service," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 699-730, September.
    14. Esteban, Susanna & Miyagawa, Eiichi & Shum, Matthew, 2007. "Nonlinear pricing with self-control preferences," Journal of Economic Theory, Elsevier, vol. 135(1), pages 306-338, July.
    15. Ulrike Malmendier, 2018. "Behavioral Corporate Finance," NBER Working Papers 25162, National Bureau of Economic Research, Inc.
    16. Ina Garnefeld & Andreas Eggert & Markus Husemann-Kopetzky & Eva Böhm, 2019. "Exploring the link between payment schemes and customer fraud: a mental accounting perspective," Journal of the Academy of Marketing Science, Springer, vol. 47(4), pages 595-616, July.
    17. Shi, Haijiao & Chen, Rong & Xu, Xiaobing, 2021. "How reward uncertainty influences subsequent donations: The role of mental accounting," Journal of Business Research, Elsevier, vol. 132(C), pages 383-391.
    18. Khan, Jashim & Belk, Russell W. & Craig-Lees, Margaret, 2015. "Measuring consumer perceptions of payment mode," Journal of Economic Psychology, Elsevier, vol. 47(C), pages 34-49.
    19. Richard J. Zeckhauser & Erzo F.P. Luttmer, 2008. "Schedule Selection by Agents: from Price Plans to Tax Tables," 2008 Meeting Papers 406, Society for Economic Dynamics.
    20. Gauthier Lanot & Mattias Vesterberg, 2019. "An empirical model of the decision to switch between electricity price contracts," Journal of Business Analytics, Taylor & Francis Journals, vol. 2(1), pages 24-46, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:45:y:2013:i:7:p:933-941. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.