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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: johan.almenberg@gmail.com. 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: anna.dreber@sifr.org.

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

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