a1 Ministry of Finance, Drottninggatan 21, 103 33 Stockholm, Sweden, e-mail: [email protected]. Corresponding author. The views in this paper are those of the authors and do not represent the views of the Ministry of Finance.
a2 Institute for Financial Research (SIFR), Drottninggatan 89, 113 60 Stockholm, Sweden; e-mail: [email protected].
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)
* We thank Emma von Essen, Robin Goldstein, Ori Heffetz, Alexis Herschkowitsch, Magnus Johannesson, Thomas Pfeiffer, David G. Rand, Eva Ranehill, Nils Wernerfelt, an anonymous referee and the editor Karl Storchmann for assistance and/or useful comments. Johan Almenberg thanks the Jacob Wallenberg Foundation and the Torsten and Ragnar Söderberg Foundations for financial support, and Johan Almenberg and Anna Dreber thank the Jan Wallander and Tom Hedelius Foundation for financial support.