IDEAS home Printed from https://ideas.repec.org/p/ags/aawewp/51755.html
   My bibliography  Save this paper

When Does The Price Affect The Taste? Results From A Wine Experiment

Author

Listed:
  • Almenberg, Johan
  • Dreber, Anna

Abstract

We designed an experiment that examines how knowledge about the price of a good, and the time at which the information is received, affects how the good is experienced. The good in question was wine, and the price was either high or low. Our results suggest that hosts offering wine to guests can safely reveal the price: much is gained if the wine is expensive, and little is lost if it is cheap. Disclosing the high price before tasting the wine produces considerably higher ratings, although only from women. Disclosing the low price, by contrast, does not result in lower ratings. Our finding indicates that price not only serves to clear markets, it also serves as a marketing tool; it influences expectations that in turn shape a consumer’s experience. In addition, our results suggest that men and women respond differently to attribute information.

Suggested Citation

  • Almenberg, Johan & Dreber, Anna, 2009. "When Does The Price Affect The Taste? Results From A Wine Experiment," Working Papers 51755, American Association of Wine Economists.
    • Handle: RePEc:ags:aawewp:51755
    DOI: 10.22004/ag.econ.51755
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/51755/files/AAWE_WP35.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.51755?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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Goldstein, Robin & Almenberg, Johan & Dreber, Anna & Emerson, John W. & Herschkowitsch, Alexis & Katz, Jacob, 2008. "Do More Expensive Wines Taste Better? Evidence from a Large Sample of Blind Tastings," Journal of Wine Economics, Cambridge University Press, vol. 3(1), pages 1-9, April.
    2. Jean Tirole & Roland Bénabou, 2006. "Incentives and Prosocial Behavior," American Economic Review, American Economic Association, vol. 96(5), pages 1652-1678, December.
    3. Tore Ellingsen & Magnus Johannesson, 2008. "Pride and Prejudice: The Human Side of Incentive Theory," American Economic Review, American Economic Association, vol. 98(3), pages 990-1008, June.
    4. von Essen, Emma & Ranehill, Eva, 2011. "Dominance and Submission: Social Status Biases Economic Sanctions," Research Papers in Economics 2011:1, Stockholm University, Department of Economics, revised Feb 2011.
    5. Frank, Robert H, 1985. "The Demand for Unobservable and Other Nonpositional Goods," American Economic Review, American Economic Association, vol. 75(1), pages 101-116, March.
    6. Lima, Tony, 2006. "Price and Quality in the California Wine Industry: An Empirical Investigation," Journal of Wine Economics, Cambridge University Press, vol. 1(2), pages 176-190, October.
    7. Hoch, Stephen J & Ha, Young-Won, 1986. "Consumer Learning: Advertising and the Ambiguity of Product Experience," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 13(2), pages 221-233, September.
    8. Hodgson, Robert T., 2008. "An Examination of Judge Reliability at a major U.S. Wine Competition," Journal of Wine Economics, Cambridge University Press, vol. 3(2), pages 105-113, January.
    9. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    10. Gerard J. Tellis & Birger Wernerfelt, 1987. "Competitive Price and Quality Under Asymmetric Information," Marketing Science, INFORMS, vol. 6(3), pages 240-253.
    11. Levin, Irwin P & Gaeth, Gary J, 1988. "How Consumers Are Affected by the Framing of Attribute Information before and after Consuming the Product," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 15(3), pages 374-378, 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. Gustafson, Christopher R. & Lybbert, Travis J. & Sumner, Daniel A., 2016. "Consumer knowledge affects valuation of product attributes: Experimental results for wine," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 65(C), pages 85-94.
    2. Caracciolo, Francesco & D’Amico, Mario & Di Vita, Giuseppe & Pomarici, Eugenio & Dal Bianco, Andrea & Cembalo, Luigi, 2016. "Private vs. Collective Wine Reputation," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(3), pages 1-20, August.
    3. Jan Zavodny Pospisil & Lucie Sara Zavodna & Matej Jiranek, 2020. "Does the Packaging Change the Perceived Taste of Beer? Results from a Beer Experiment," Tržište/Market, Faculty of Economics and Business, University of Zagreb, vol. 32(1), pages 65-78.
    4. Liesbeth Colen & George Chryssochoidis & Pavel Ciaian & Federica Di Marcantonio, 2020. "Differences in composition of seemingly identical branded products: Impact on consumer purchase decisions and welfare," JRC Research Reports JRC118149, Joint Research Centre.
    5. Rössel, Jörg & Beckert, Jens, 2012. "Quality classifications in competition: Price formation in the German wine market," MPIfG Discussion Paper 12/3, Max Planck Institute for the Study of Societies.
    6. Costanigro, Marco & Scozzafava, Gabriele & Casini, Leonardo, 2019. "Vertical differentiation via multi-tier geographical indications and the consumer perception of quality: The case of Chianti wines," Food Policy, Elsevier, vol. 83(C), pages 246-259.
    7. Sanjiv Erat & Sreekumar R. Bhaskaran, 2012. "Consumer Mental Accounts and Implications to Selling Base Products and Add-ons," Marketing Science, INFORMS, vol. 31(5), pages 801-818, September.
    8. Clarissa Laura Maria Spiess Bru, 2023. "Does the Tasting Note Matter? Language Categories and Their Impact on Professional Ratings and Prices," Working Papers Dissertations 105, Paderborn University, Faculty of Business Administration and Economics.
    9. Zander, K. & Janssen, M., 2013. "Präferenzen deutscher Öko-Konsumenten für Wein," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 48, March.
    10. Ahmed H. Alsharif & Nor Zafir Md Salleh & Mazilah Abdullah & Ahmad Khraiwish & Azmirul Ashaari, 2023. "Neuromarketing Tools Used in the Marketing Mix: A Systematic Literature and Future Research Agenda," SAGE Open, , vol. 13(1), pages 21582440231, February.

    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. Gary Charness & David Masclet & Marie Claire Villeval, 2014. "The Dark Side of Competition for Status," Management Science, INFORMS, vol. 60(1), pages 38-55, January.
    2. Mitesh Kataria & Tobias Regner, 2015. "Honestly, why are you donating money to charity? An experimental study about self-awareness in status-seeking behavior," Theory and Decision, Springer, vol. 79(3), pages 493-515, November.
    3. Gary Charness & David Masclet & Marie Claire Villeval, 2014. "The Dark Side of Competition for Status (preprint)," Working Papers halshs-01090241, HAL.
    4. Luise Goerges & Tom Lane & Daniele Nosenzo & Silvia Sonderegger, 2023. "Equal before the (expressive power of) law?," Economics Working Papers 2023-12, Department of Economics and Business Economics, Aarhus University.
    5. Adriani, Fabrizio & Sonderegger, Silvia, 2019. "A theory of esteem based peer pressure," Games and Economic Behavior, Elsevier, vol. 115(C), pages 314-335.
    6. Boris van Leeuwen & Ingela Alger, 2024. "Estimating Social Preferences and Kantian Morality in Strategic Interactions," Post-Print hal-04840937, HAL.
    7. Dalmia, Prateik & Filiz-Ozbay, Emel, 2021. "Your success is my motivation," Journal of Economic Behavior & Organization, Elsevier, vol. 181(C), pages 49-85.
    8. Masclet, David & Dickinson, David L., 2019. "Incorporating Conditional Morality into Economic Decisions," IZA Discussion Papers 12782, Institute of Labor Economics (IZA).
    9. Volker Benndorf & Holger A. Rau & Christian Sölch, 2019. "Gender Differences In Motivational Crowding Out Of Work Performance," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 206-226, January.
    10. Alger, Ingela, 2022. "Evolutionarily stable preferences," TSE Working Papers 22-1355, Toulouse School of Economics (TSE), revised Dec 2022.
    11. Cappellari, Lorenzo & Ghinetti, Paolo & Turati, Gilberto, 2011. "On time and money donations," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(6), pages 853-867.
    12. Boris van Leeuwen & Ingela Alger, 2024. "Estimating Social Preferences and Kantian Morality in Strategic Interactions," Journal of Political Economy Microeconomics, University of Chicago Press, vol. 2(4), pages 665-706.
    13. Andersson, Per A. & Erlandsson, Arvid & Västfjäll, Daniel & Tinghög, Gustav, 2020. "Prosocial and moral behavior under decision reveal in a public environment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 87(C).
    14. Gary Bolton & Eugen Dimant & Ulrich Schmidt, 2018. "When a Nudge Backfires. Using Observation with Social and Economic Incentives to Promote Pro-Social Behavior," PPE Working Papers 0017, Philosophy, Politics and Economics, University of Pennsylvania.
    15. Christian Thoeni & Simon Gaechter, 2011. "Peer Effects and Social Preferences in Voluntary Cooperation," Discussion Papers 2011-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    16. Carattini, Stefano & Gillingham, Kenneth & Meng, Xiangyu & Yoeli, Erez, 2024. "Peer-to-peer solar and social rewards: Evidence from a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 219(C), pages 340-370.
    17. Beckmann, Michael & Cornelissen, Thomas & Kräkel, Matthias, 2017. "Self-managed working time and employee effort: Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 285-302.
    18. Ivan Soraperra & Anton Suvorov & Jeroen Van de Ven & Marie Claire Villeval, 2019. "Doing Bad to Look Good: Negative Consequences of Image Concerns on Prosocial Behavior," Revue économique, Presses de Sciences-Po, vol. 70(6), pages 945-966.
    19. Alpízar, Francisco & Martinsson, Peter, 2010. "Don’t Tell Me What to Do, Tell Me Who to Follow! - Field Experiment Evidence on Voluntary Donations," Working Papers in Economics 452, University of Gothenburg, Department of Economics.
    20. Linardi, Sera & McConnell, Margaret A., 2011. "No excuses for good behavior: Volunteering and the social environment," Journal of Public Economics, Elsevier, vol. 95(5), pages 445-454.

    More about this item

    Keywords

    Consumer/Household Economics; Demand and Price Analysis;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ags:aawewp:51755. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaweeea.html .

    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.