Reduced Form Evidence on Belief Updating under Asymmetric Information - The Case of Wine Expert Opinions

Bonnet, Céline, Hilger, James and Villas-Boas, Sofia B. (2017) Reduced Form Evidence on Belief Updating under Asymmetric Information - The Case of Wine Expert Opinions. TSE Working Paper, n. 17-834, Toulouse

[img]
Preview
Text
Download (1MB) | Preview
Official URL: http://tse-fr.eu/pub/31956

Abstract

We estimate the effect of revealing expert opinion labels on wine product purchases
through a field experiment where a random subset of wine products within the con-
sumers' retail shelf choice set are labeled in the treatment store. We use a detailed
weekly product level panel scanner data set for labeled and unlabeled wines in the
treatment and comparable control stores before and after the implementation of a
product-level labeling field experiment. We combine the scanner data with additional
information on the characteristics of each product, such as brand, varietal, region of
production, and price to estimate the average and heterogeneous effects of the field
experiment on wine consumption. Consistent with earlier work, we find there to be a
positive and significant overall average effect and that demand increases more for higher
score wines than for lower score wines. We advance the literature with the following:
one, higher scores matter more for prices in the lower quartile of the overall wine price
distribution whereas demand does not move for the higher priced wine quartile, once
quality is revealed; the result is consistent with pre treatment consumer behavior where
consumers infer high quality for high prices. Two, we find positive spillover effects of
this experimental treatment within brand for untreated wines as the displayed average
score of the wine brand increases. However, we also obtain negative spillover effects
for untreated wines that belong to intensively treated brands.

Item Type: Monograph (Working Paper)
Language: English
Date: August 2017
Place of Publication: Toulouse
Uncontrolled Keywords: Field experiment, Labels, information, expert opinion, wine, product attributes
JEL codes: C23 - Models with Panel Data
D12 - Consumer Economics - Empirical Analysis
H20 - General
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 16 Apr 2018 15:24
Last Modified: 23 May 2019 12:26
OAI ID: oai:tse-fr.eu:31956
URI: http://publications.ut-capitole.fr/id/eprint/25669

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year