What Brings a Consumer Back for More? Evidence from Quantifiable Gain and Loss Experiences in Penny Auctions
2016/03/08
研討會日期 : 2016-03-08
時間 : 14:30
主講人 : Professor Jaimie Lien
主持人 : Professor Wei-Torng Juang
地點 : Conference Room B110
演講者簡介 : Professor Lien received her Ph.D. in Economics from University of California, San Diego at 2010. She is currently an Assistant Professor at Chinese University of Hong Kong. Her research fields are Microeconomics, Behavioral Economics, and Experimental Economics.
演講摘要 : Evidence increasingly points to the importance of reference-dependence in predicting consumer behavior. We utilize detailed data from penny auctions, which first appeared as an internet phenomenon in the late 2000’s, to uncover how consumers’ prior experiences predict their willingness to try a relatively new experience again. A reference-dependent model of consumers’ propensity to return explains the key empirical facts in the data, which correspond to intuitive consumer responses to prior experiences in many other field settings: First, consumers’ tendency to return is at least weakly increasing in the outcome from their prior experience; Second, consumers’ return rate on marginal loss experiences drops more steeply than it increases for marginal gain experiences; Third, consumers have an aversion to losing at any level, which makes them discontinuously less likely to return after any loss compared to after a gain. The penny auction setting allows us to concretely quantify consumers’ positive and negative experiences, which typically involves measurement challenges in other settings. Finally, we examine the bracketing tendencies of consumers in calculating their gains and losses after repeated experiences, and find that consumers tend to bracket narrowly, with the aforementioned patterns appearing most strongly as a function of their most recent experience. This is consistent with the intuition that consumers have “short memories” and that a recent bad experience is likely to drive them away permanently, in spite of previous positive experiences.
