The effect of olfactory sensory cues on economic decision making

Andreas Drichoutis and Varvara Kechagia ()
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Varvara Kechagia: Agricultural University of Athens

No 2016-4, Working Papers from Agricultural University of Athens, Department Of Agricultural Economics

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 e ect of ambient scents fail on one or both of these criteria: to properly control the in infuence 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 signi cant e ect 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 nd a statistically signi cant 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)
Pages: 55
Date: 2016
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
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Working Paper: The effect of olfactory sensory cues on economic decision making (2016)
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