EconPapers    
Economics at your fingertips  
 

A Matter of Taste: The Negative Welfare Effect of Expert Judgments

Nicolas Lagios and Pierre-Guillaume Méon

No 23-009, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: Expert judgments may increase or decrease consumer welfare depending on experts’ ability to redirect consumers toward goods they enjoy. Leveraging the discontinuity created by the attribution of the Booker Prize, a leading literary award, we confirm that the prize attracts readers to consumption. We then investigate how it affects consumer surplus. We measure consumer ex post satisfaction from reading a book by the sentiment and the rating of the reviews posted on Amazon. We show that the Booker reduces satisfaction and that this negative effect is driven by a misalignment between the tastes of the jury and those of consumers. We quantify the associated loss in welfare by calibrating a structural model of demand. We find that the prize reduces consumer surplus by USD135,000 annually, meaning that a consumer buying a Booker Prize-winning book experiences a loss in surplus of 4% of the average price of a book.

Keywords: Awards; Prizes; Welfare; Sales; Experts; Books; Consumer Surplus (search for similar items in EconPapers)
JEL-codes: D12 D83 L15 L82 Z11 (search for similar items in EconPapers)
Date: 2023-09-30
New Economics Papers: this item is included in nep-cul and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published by:

Downloads: (external link)
https://dipot.ulb.ac.be/dspace/bitstream/2013/363374/3/wp23009.pdf Full text for the whole work, or for a work part (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sol:wpaper:2013/363374

Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... lb.ac.be:2013/363374

Access Statistics for this paper

More papers in Working Papers CEB from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().

 
Page updated 2024-04-08
Handle: RePEc:sol:wpaper:2013/363374