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Toward an understanding of the economics of apologies: evidence from a large-scale natural field experiment

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Listed:
  • Basil Halperin
  • Benjamin Ho
  • John List
  • Ian Muir

Abstract

We use a theory of apologies to analyze a nationwide field experiment involving 1.5 million Uber ridesharing consumers who experienced late rides. Several insights emerge. First, apologies are not a panacea: the efficacy of an apology and whether it may backfire depend on how the apology is made. Second, across treatments, money speaks louder than words - the best form of apology is to include a coupon for a future trip. Third, in some cases sending an apology is worse than sending nothing at all, particularly for repeated apologies. For firms, caveat venditor should be the rule when considering apologies.

Suggested Citation

  • Basil Halperin & Benjamin Ho & John List & Ian Muir, 2018. "Toward an understanding of the economics of apologies: evidence from a large-scale natural field experiment," Natural Field Experiments 00644, The Field Experiments Website.
    • Handle: RePEc:feb:natura:00644
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    References listed on IDEAS

    as
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    12. Ben Gilbert & Alexander James & Jason F. Shogren, 2018. "Corporate apology for environmental damage," Journal of Risk and Uncertainty, Springer, vol. 56(1), pages 51-81, February.
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    14. Gary Charness & Martin Dufwenberg, 2006. "Promises and Partnership," Econometrica, Econometric Society, vol. 74(6), pages 1579-1601, November.
    15. Cody Cook & Rebecca Diamond & Jonathan V Hall & John A List & Paul Oyer, 2021. "The Gender Earnings Gap in the Gig Economy: Evidence from over a Million Rideshare Drivers [Measuring the Gig Economy: Current Knowledge and Open Issues]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(5), pages 2210-2238.
    16. Fischbacher, Urs & Utikal, Verena, 2013. "On the acceptance of apologies," Games and Economic Behavior, Elsevier, vol. 82(C), pages 592-608.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. How Should You Ask for Forgiveness? (NSQ Ep. 27)
      by Rebecca Lee Douglas in Freakonomics on 2020-11-15 10:00:22

    Citations

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    Cited by:

    1. Huang, Lidingrong, 2021. "Do not apologise too early," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    2. John A. List, 2024. "Optimally generate policy-based evidence before scaling," Nature, Nature, vol. 626(7999), pages 491-499, February.
    3. Moshe A. Barach & Joseph M. Golden & John J. Horton, 2020. "Steering in Online Markets: The Role of Platform Incentives and Credibility," Management Science, INFORMS, vol. 66(9), pages 4047-4070, September.
    4. Bharat Chandar & Uri Gneezy & John A. List & Ian Muir, 2019. "The Drivers of Social Preferences: Evidence from a Nationwide Tipping Field Experiment," NBER Working Papers 26380, National Bureau of Economic Research, Inc.
    5. Kyeong Sam Min & Jae Min Jung & Kisang Ryu & Curtis Haugtvedt & Sathiadev Mahesh & John Overton, 2020. "Timing of apology after service failure: the moderating role of future interaction expectation on customer satisfaction," Marketing Letters, Springer, vol. 31(2), pages 217-230, September.
    6. Fan, Sijia & Ge, Qi & Ho, Benjamin & Ma, Lirong, 2023. "Sorry Doesn't Cut It, or Does It? Insights from Stock Market Responses to Corporate Apologies," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 68-86.
    7. Hill Cummings, Krista & Seitchik, Allison E., 2020. "The differential treatment of women during service recovery: How perceived social power affects consumers’ postfailure compensation," Business Horizons, Elsevier, vol. 63(5), pages 647-658.
    8. Maxime C. Cohen & Michael D. Fiszer & Baek Jung Kim, 2022. "Frustration-Based Promotions: Field Experiments in Ride-Sharing," Management Science, INFORMS, vol. 68(4), pages 2432-2464, April.
    9. Wang, Hai & Yang, Hai, 2019. "Ridesourcing systems: A framework and review," Transportation Research Part B: Methodological, Elsevier, vol. 129(C), pages 122-155.
    10. Moshe A. Barach & Joseph M. Golden & John J. Horton, 2019. "Steering in Online Markets: The Role of Platform Incentives and Credibility," NBER Working Papers 25917, National Bureau of Economic Research, Inc.
    11. Li, Xiaonan & Li, Xiangyong & Wang, Hai & Shi, Junxin & Aneja, Y.P., 2022. "Supply regulation under the exclusion policy in a ride-sourcing market," Transportation Research Part B: Methodological, Elsevier, vol. 166(C), pages 69-94.

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    More about this item

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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