Do Consumers Prefer Offers that are Easy to Compare? An Experimental Investigation

38 Pages Posted: 8 Feb 2012 Last revised: 4 Mar 2012

See all articles by Paolo Crosetto

Paolo Crosetto

Grenoble Applied Economics Laboratory

Alexia Gaudeul

Joint Research Center of the European Commission

Multiple version iconThere are 3 versions of this paper

Date Written: February 27, 2012

Abstract

Consumers make mistakes when facing complex purchasing decision problems but if at least some consumers disregard any offers that is difficult to compare with others then firms will adopt common ways to present their offers and thus make choice easier. We design an original experiment to identify consumers’ choice heuristics in the lab. Subjects are asked to choose from menus of offers and we measure the extent to which they favor those offers that are easy to compare with others in the menu. A sufficient number of subjects do so with sufficient intensity for offers presented in common terms to generate higher revenues than offers that are expressed in an idiosyncratic way.

Keywords: Bounded Rationality, Cognitive Limitations, Standards, Consumer Choice, Experimental Economics, Heuristics, Pricing Formats, Spurious Complexity

JEL Classification: D83, L13, D18

Suggested Citation

Crosetto, Paolo and Gaudeul, Alexia, Do Consumers Prefer Offers that are Easy to Compare? An Experimental Investigation (February 27, 2012). Available at SSRN: https://ssrn.com/abstract=2001489 or http://dx.doi.org/10.2139/ssrn.2001489

Paolo Crosetto

Grenoble Applied Economics Laboratory ( email )

BP 47
38040 Grenoble
France

Alexia Gaudeul (Contact Author)

Joint Research Center of the European Commission ( email )

Via E. Fermi 2749
Brussels, B-1049
Belgium

HOME PAGE: http://https://knowledge4policy.ec.europa.eu/behavioural-insights/about_en

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