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Do Good Things Come in Small Packages? Bottle Size Effects on Willingness to Pay for Pomegranate Wine and Grape Wine*

Published online by Cambridge University Press:  19 May 2017

Andreas C. Drichoutis ,
Stathis Klonaris  and
Georgia S. Papoutsi
Andreas C. Drichoutis*
Affiliation:
Department of Agricultural Economics & Rural Development, Agricultural University of Athens, Iera Odos 75, 11855, Athens, Greece
Stathis Klonaris
Affiliation:
Department of Agricultural Economics & Rural Development, Agricultural University of Athens, Iera Odos 75, 11855, Athens, Greece; e-mail: [email protected].
Georgia S. Papoutsi
Affiliation:
Department of Agricultural Economics & Rural Development, Agricultural University of Athens, Iera Odos 75, 11855, Athens, Greece; e-mail: [email protected].
*
e-mail: [email protected] (corresponding author)
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Abstract

We evaluate the claim that bottle size formats signal quality changes by performing a controlled laboratory experiment in which we simultaneously auction two different sweet wines: a pomegranate wine and a grape wine. We vary the size of the bottle from 500 mL to 750 mL between participants, but we keep the amount of wine constant across the bottle sizes. We also explore the effect of expectations for the wines, blind tasting, and information about wine attributes on people's willingness to pay (WTP). For both wines, we find evidence consistent with diminishing marginal utility; for the pomegranate wine, we find a premium for the smaller bottle size, which is consistent with changes in the wine's perceived quality. We also find that information is adequate in offsetting the negative effect of the tasting treatment. (JEL Classifications: C23, C24, C91, D12, M31)

Keywords

bottle size effectlaboratory experimentsecond price auctionsensory analysiswillingness to pay
Type
Articles
Information
Journal of Wine Economics , Volume 12 , Issue 1 , February 2017 , pp. 84 - 104
Copyright
Copyright © American Association of Wine Economists 2017 

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Footnotes

*

We would like to thank the Editor and an anonymous reviewer for valuable suggestions. We would also like to thank Angelos Lagoudakis, Varvara Kechagia, Markella Bakalarou, Giorgos Koutsaftakis, and Dafni Papapanagiotou for excellent research assistance. Data collection was financially supported by the municipality of Athens through the grant Innovation and Entrepreneurship – Valorization of Research by the Agricultural University of Athens (Reference no 464052).

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