Toward an Understanding of the Economics of Apologies: Evidence from a Large-Scale Natural Field Experiment

39 Pages Posted: 27 Mar 2019 Last revised: 29 Aug 2021

See all articles by Basil Halperin

Basil Halperin

Massachusetts Institute of Technology (MIT) - Department of Economics

Benjamin Ho

Vassar College

John A. List

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Ian Muir

Lyft, Inc.

Date Written: March 2019

Abstract

We use a theory of apologies to design a nationwide field experiment involving 1.5 million Uber ridesharing consumers who experienced late rides. Several insights emerge from our field experiment. First, apologies are not a panacea: the efficacy of an apology and whether it may backfire depend on how the apology is made. Second, across treatments, money speaks louder than words – the best form of apology is to include a coupon for a future trip. Third, in some cases sending an apology is worse than sending nothing at all, particularly for repeated apologies. For firms, caveat venditor should be the rule when considering apologies.

Suggested Citation

Halperin, Basil and Ho, Benjamin and List, John A. and Muir, Ian, Toward an Understanding of the Economics of Apologies: Evidence from a Large-Scale Natural Field Experiment (March 2019). NBER Working Paper No. w25676, Available at SSRN: https://ssrn.com/abstract=3360827

Basil Halperin (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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E52-391
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Benjamin Ho

Vassar College ( email )

124 Raymond Avenue
Poughkeepsie, NY 12604
United States

John A. List

University of Chicago - Department of Economics ( email )

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Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

IZA Institute of Labor Economics

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Ian Muir

Lyft, Inc. ( email )

San Francisco, CA

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