Repairing the Damage: The Effect of Price Expectations on Auto-Repair Price Quotes

Meghan R. Busse, Ayelet Israeli and Florian Zettelmeyer

No 19154, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper we investigate whether sellers treat consumers differently on the basis of how well-informed consumers appear to be. We implement a large-scale field experiment in which callers request price quotes from automotive repair shops. We show that sellers alter their initial price quotes depending on whether consumers appear to be well-informed, uninformed, or poorly informed about market prices. We find that repair shops quote higher prices to callers who cite a higher expected price. We find that women are quoted higher prices than men when callers signal that they are uninformed about market prices. However, gender differences disappear when callers mention an expected price for the repair. Finally, we find that repair shops are more likely to offer a price concession if asked to do so by a woman than a man.

JEL-codes: D12 D83 (search for similar items in EconPapers)
Date: 2013-06
New Economics Papers: this item is included in nep-dem and nep-exp
Note: IO
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Citations: View citations in EconPapers (1)

Published as Meghan R. Busse, Ayelet Israeli, and Florian Zettelmeyer (2017) Repairing the Damage: The Effect of Price Knowledge and Gender on Auto Repair Price Quotes. Journal of Marketing Research: February 2017, Vol. 54, No. 1, pp. 75-95.

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