The compromise effect in action: Lessons from a restaurant's menu

Pia Pinger, Isabel Ruhmer-Krell and Heiner Schumacher

Journal of Economic Behavior & Organization, 2016, vol. 128, issue C, 14-34

Abstract: The compromise effect refers to individuals’ tendency to choose intermediate options. Its existence has been demonstrated in a large number of hypothetical choice experiments. This paper uses field data from a specialties restaurant to investigate the existence and strength of the compromise effect in a natural environment. Despite the presence of many factors that potentially weaken the compromise effect (e.g., a very large choice set, the opportunity to choose familiar options), we find evidence for it both in descriptive statistics and regression analyses. Options which become a compromise after a change in the choice set gain on average five percent in market share.

Keywords: Utility theory; Restaurant data; Compromise effect (search for similar items in EconPapers)
JEL-codes: D03 M31 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (8)

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Working Paper: The Compromise Effect in Action: Lessons from a Restaurant's Menu (2016)
Working Paper: The Compromise Effect in Action: Lessons from a Restaurant's Menu (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:128:y:2016:i:c:p:14-34

DOI: 10.1016/j.jebo.2016.04.017

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