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Price as a Signal of Product Quality: Some Experimental Evidence

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Price as a Signal of Product Quality : Some Experimental Evidence. / Mastrobuoni, Giovanni; Peracchi, Franco; Tetenov, Aleksey.

In: Journal of Wine Economics, Vol. 9, No. 2, 03.07.2014, p. 135-152.

Research output: Contribution to journalArticle

Harvard

Mastrobuoni, G, Peracchi, F & Tetenov, A 2014, 'Price as a Signal of Product Quality: Some Experimental Evidence' Journal of Wine Economics, vol. 9, no. 2, pp. 135-152. https://doi.org/10.1017/jwe.2014.17

APA

Mastrobuoni, G., Peracchi, F., & Tetenov, A. (2014). Price as a Signal of Product Quality: Some Experimental Evidence. Journal of Wine Economics, 9(2), 135-152. https://doi.org/10.1017/jwe.2014.17

Vancouver

Mastrobuoni G, Peracchi F, Tetenov A. Price as a Signal of Product Quality: Some Experimental Evidence. Journal of Wine Economics. 2014 Jul 3;9(2):135-152. https://doi.org/10.1017/jwe.2014.17

Author

Mastrobuoni, Giovanni ; Peracchi, Franco ; Tetenov, Aleksey. / Price as a Signal of Product Quality : Some Experimental Evidence. In: Journal of Wine Economics. 2014 ; Vol. 9, No. 2. pp. 135-152.

Bibtex

@article{880464043dc9429b808bb8c0404ae2f4,
title = "Price as a Signal of Product Quality: Some Experimental Evidence",
abstract = "We use experimental data to disentangle the signaling and budgetary effects of price on wine demand. The experimental design allows us to isolate the two effects in a simple and intuitive way. The signaling effect is present and nonlinear: it is strongly positive between 3 euros and 5 euros and undetectable between 5 euros and 8 euros. We find a similar nonlinear price–quality relationship in a large sample of wine ratings from the same price segment, supporting the hypothesis that taster behavior in the experiment is consistent with rationally using prices as signals of quality. Price signals also have greater importance for inexperienced (young) consumers.",
keywords = "pricing, product quality, signaling, wine ratings",
author = "Giovanni Mastrobuoni and Franco Peracchi and Aleksey Tetenov",
year = "2014",
month = "7",
day = "3",
doi = "10.1017/jwe.2014.17",
language = "English",
volume = "9",
pages = "135--152",
journal = "Journal of Wine Economics",
issn = "1931-4361",
publisher = "Cambridge University Press",
number = "2",

}

RIS - suitable for import to EndNote

TY - JOUR

T1 - Price as a Signal of Product Quality

T2 - Journal of Wine Economics

AU - Mastrobuoni, Giovanni

AU - Peracchi, Franco

AU - Tetenov, Aleksey

PY - 2014/7/3

Y1 - 2014/7/3

N2 - We use experimental data to disentangle the signaling and budgetary effects of price on wine demand. The experimental design allows us to isolate the two effects in a simple and intuitive way. The signaling effect is present and nonlinear: it is strongly positive between 3 euros and 5 euros and undetectable between 5 euros and 8 euros. We find a similar nonlinear price–quality relationship in a large sample of wine ratings from the same price segment, supporting the hypothesis that taster behavior in the experiment is consistent with rationally using prices as signals of quality. Price signals also have greater importance for inexperienced (young) consumers.

AB - We use experimental data to disentangle the signaling and budgetary effects of price on wine demand. The experimental design allows us to isolate the two effects in a simple and intuitive way. The signaling effect is present and nonlinear: it is strongly positive between 3 euros and 5 euros and undetectable between 5 euros and 8 euros. We find a similar nonlinear price–quality relationship in a large sample of wine ratings from the same price segment, supporting the hypothesis that taster behavior in the experiment is consistent with rationally using prices as signals of quality. Price signals also have greater importance for inexperienced (young) consumers.

KW - pricing

KW - product quality

KW - signaling

KW - wine ratings

U2 - 10.1017/jwe.2014.17

DO - 10.1017/jwe.2014.17

M3 - Article

VL - 9

SP - 135

EP - 152

JO - Journal of Wine Economics

JF - Journal of Wine Economics

SN - 1931-4361

IS - 2

ER -