The effect of olfactory sensory cues on economic decision making

Varvara Kechagia and Andreas Drichoutis

MPRA Paper from University Library of Munich, Germany

Abstract: Several studies show that sensory cues influence consumer decision making processes. While scent is a key component of a market's physical environment, it has received far less attention in the academic literature as compared, for example, with visual cues. In addition, most of the studies that examine the effect of ambient scents fail on one or both of these criteria: to properly control the influence of nuisance factors and/or to elicit preferences under real monetary incentives. We collected data from a laboratory experiment where we varied on a between subjects basis the dispersion of a citrus fragrance. We then elicited subjects' willingness to pay for two unbranded products - a mug and a chocolate - by having subjects participate in a 2nd price Vickrey auction. We also elicited subjects' risk preferences using lottery choice tasks. Our results show a statistically and economically significant effect on subjects' willingness to pay: valuations increased between 37% - 43% for subjects who were exposed to a citrus scent as compared to the control group. We do not find a statistically significant effect of the citrus scent on subjects' risk aversion.

Keywords: scent cues; fragrance; olfactory; willingness to pay; risk preferences; risk aversion; laboratory experiment (search for similar items in EconPapers)
JEL-codes: C91 D44 D81 D87 (search for similar items in EconPapers)
Date: 2016-10-10
New Economics Papers: this item is included in nep-cbe, nep-dcm and nep-exp
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Related works:
Working Paper: The effect of olfactory sensory cues on economic decision making (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:75293

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