Do Consumers Prefer Offers that are Easy to Compare? An Experimental Investigation
39 Pages Posted: 21 Sep 2012 Last revised: 11 May 2015
Date Written: September 20, 2012
Firms can exploit consumers' mistakes when facing complex purchasing decision problems but Gaudeul and Sugden (2012) argue that if at least some consumers disregard offers that are difficult to compare with others then firms will be forced into adopting common ways to present their offers and thus make choice easier. We design an original experiment to check whether consumers’ indeed favor those offers that are easy to compare with others in a 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: C91, D18, D83, L13
Suggested Citation: Suggested Citation