The Power of Apology
Kai Andree () and
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Juljana Calaki: University of Bonn
Christoph Basek: University of Bonn
No 2009-12, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham
After an unsatisfactory purchase, many firms are quick to apologize to customers. It is, however, not clear why they should do that. As the apology is costless, it should be regarded as cheap talk and thus ignored by the customer. In this paper, we test in a controlled field experiment whether apologizing inuences customers' subsequent behavior. We find that apologizing yields much better outcomes for the firm than offering a monetary compensation.
Keywords: Apology; Credulity; Natural Field Experiment (search for similar items in EconPapers)
JEL-codes: C93 D82 L81 (search for similar items in EconPapers)
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Journal Article: The power of apology (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notcdx:2009-12
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