Hostname: page-component-78c5997874-ndw9j Total loading time: 0 Render date: 2024-11-03T02:29:36.863Z Has data issue: false hasContentIssue false

When Does the Price Affect the Taste? Results from a Wine Experiment*

Published online by Cambridge University Press:  08 June 2012

Johan Almenberg
Affiliation:
Ministry of Finance, Drottninggatan 21, 103 33 Stockholm, Sweden, e-mail: [email protected]. Corresponding author. The views in this paper are those of the authors and do not represent the views of the Ministry of Finance.
Anna Dreber
Affiliation:
Institute for Financial Research (SIFR), Drottninggatan 89, 113 60 Stockholm,Sweden; e-mail: [email protected].

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 a high price before tasting the wine produces considerably higher ratings, although only from women. Disclosing a low price, by contrast, does not result in lower ratings. Our finding supports the notion that price not only serves to clear markets, it also influences expectations that in turn shape a consumer's experience. In addition, our results suggest that men and women respond differently to attribute information concerning wine. (JEL Classification: C91, D03, D83, M31)

Type
Articles
Copyright
Copyright © American Association of Wine Economists 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Amerine, M.A. and Roessler, E.B. (1976). Wines: Their Sensory Evaluation. San Francisco: W.H. Freeman and Company.Google Scholar
Ariely, D. and Norton, M.I. (2009). Conceptual consumption. Annual Review of Psychology, 60, 475499.CrossRefGoogle ScholarPubMed
Brochet, F. (2001). Chemical object representation in the field of consciousness. Working Paper, General Oenology Laboratory, Talence, France.Google Scholar
Cialdini, R.B. (1998). Influence: The Psychology of Persuasion. New York: Collins.Google Scholar
Combris, P., Lange, C. and Issanchou, S. (2006). Assessing the effect of information on reservation prices for champagne: What are consumers actually paying for? Journal of Wine Economics, 1, 7588.CrossRefGoogle Scholar
Croson, R. and Gneezy, U. (2009). Gender differences in preferences. Journal of Economic Literature, 47, 448474.Google Scholar
Frank, R.H. (1999). Luxury Fever. New York: Free Press.Google Scholar
Goldstein, R., Almenberg, J., Dreber, A., Emerson, J.W., Herschkowitsch, A. and Katz, J. (2008). Do more expensive wines taste better? Evidence from a large sample of blind tastings. Journal of Wine Economics, 3, 19.CrossRefGoogle Scholar
Griskevicius, V., Tybur, J.M., Sundie, J.M., Cialdini, R.B., Miller, G.F. and Kenrick, D.T. (2007). Blatant benevolence and conspicuous consumption: When romantic motives elicit strategic costly signals. Journal of Personality and Social Psychology, 93, 85102.CrossRefGoogle ScholarPubMed
Hasseldine, J. and Hite, P.A. (2003). Framing, gender and tax compliance. Journal of Economic Psychology, 24, 517533.CrossRefGoogle Scholar
Heffetz, O. and Shayo, M. (2009). How large are non-budget-constraint effects of prices on demand? American Economic Journal: Applied Economics, 1, 170199.Google Scholar
Hoch, S.J. and Ha, Y.-W. (1986). Consumer learning: Advertising and the ambiguity of product experience. Journal of Consumer Research, 13, 221233.CrossRefGoogle Scholar
Hodgson, R.T. (2008). An examination of judge reliability at a major U.S. wine competition. Journal of Wine Economics, 3, 105113.CrossRefGoogle Scholar
Lecocq, S. and Visser, M. (2006). What determines wine prices: objective vs. sensory characteristics. Journal of Wine Economics, 1, 4256.CrossRefGoogle Scholar
Lee, L., Frederick, S. and Ariely, D. (2006). Try it, you'll like it – the influence of expectation, consumption, and revelation on preferences for beer. Psychological Science, 17, 10541058.Google Scholar
Levin, I.P. and Gaeth, G.J. (1988). How consumers are affected by the framing of attribute information before and after consuming the product. Journal of Consumer Research, 15, 374378.Google Scholar
Lichtenstein, D.R. and Burton, S. (1989). The relationship between perceived and objective price-quality. Journal of Marketing, 26, 429443.Google Scholar
Mellström, C. and Johannesson, M. (2008). Crowding out in blood donation: was Titmuss right? Journal of the European Economic Association, 6, 845863.CrossRefGoogle Scholar
Plassmann, H., O'Doherty, J., Shiv, B. and Rangel, A. (2008). Marketing actions can modulate neural representations of experienced pleasantness. Proceedings of the National Academy of Sciences PNAS, 105, 10501054.CrossRefGoogle ScholarPubMed
Rao, A.R. and Monroe, K.B. (1989). The effect of price, brand name, and store name on buyers' perceptions of product quality: an integrative review. Journal of Marketing Research, 36, 351357.Google Scholar
Schnabel, H. and Storchmann, K. (2010). Prices as quality signals: evidence from the wine market. Journal of Agricultural & Food Industrial Organization, 8.Google Scholar
Tellis, G.J. and Wernerfeit, B. (1987). Competitive price and quality under asymmetric information. Marketing Science, 6, 240253.CrossRefGoogle Scholar
Weil, R.L. (2001). Parker vs. Prial: the death of the vintage chart. Chance, 14, 2731.Google Scholar
Weil, R.L. (2005). Analysis of reserve and regular bottlings: why pay for a difference only the critics claim to notice? Chance, 18, 915.CrossRefGoogle Scholar
Weil, R.L. (2008). Debunking critics' wine words: can amateurs distinguish the smell of asphalt from the taste of cherries? Journal of Wine Economics, 2, 136144.Google Scholar