How Markets Alleviate the Excessive Choice Effect: A Field Experiment on Craft Beer Choice

Trey Malone () and Jayson Lusk

No 205965, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: Research in psychology suggests that, somewhat paradoxically, providing consumers more choice can reduce the likelihood of making a purchase, producing the so-called excessive choice effect (ECE). To the extent the ECE exists, firms have an incentive to alleviate the effect through a variety of consumer-focused institutions that lower search costs. This study determines the effectiveness of three consumer-focused institutions on the excessive choice effect in a field experiment focused on beer sales in a restaurant. We manipulate the number of options on the menu (6 vs. 12) in addition to the use of search cost lowering consumer-focused institutions (a control, a menu, a menu with a special prominently displayed, a menu with local options prominently highlighted, and a menu with beer advocate scores). Although we find that consumers tend to be more likely to order beer when presented 6 rather than 12 options, the differences are often not significant depending which data are used and how it is analyzed. Highlighting specials or listing beer rankings have an effect on consumer choices, and have the potential to decrease the excessive choice effect. The experiment also suggests including a special is the most effective way to increase sales of a product category, but not the specific product itself.

Keywords: Institutional and Behavioral Economics; Marketing (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-mkt
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/205965/files/AAEA2015Poster_MaloneLusk.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:205965

DOI: 10.22004/ag.econ.205965

Access Statistics for this paper

More papers in 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().