Making the Wait Worthwhile: Experiments on the Effect of Queueing on Consumption
45 Pages Posted: 27 Jul 2017 Last revised: 28 Nov 2018
Date Written: November 13, 2018
This paper investigates the relationship between waiting time and subsequent purchase decisions. The prior literature assumes that purchase decisions are independent from the waiting time. In contrast, we find that when people spend a longer time waiting in a line, they tend to consume more. We identify mental accounting for sunk costs as the underlying mechanism that drives this behavior; a larger purchase allows customers to offset the long wait suffered. Finally, we explore the effect of managerial practices commonly employed by firms to improve customers’ waiting experience. We find that while these practices indeed result in improved customer experience, they can actually result in lower consumption at the individual level.
Keywords: Mental Accounting, Sunk Cost Fallacy, Consumer Behavior in Queues, Behavioral Operations
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