The Compromise Effect in Action: Lessons from a Restaurant's Menu

Pia Pinger, Isabel Ruhmer-Krell and Heiner Schumacher

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

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. We also find that the compromise effect is especially pronounced in groups, while for single customers it is statistically insignificant.

JEL-codes: C93 D03 M31 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-exp
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Citations: View citations in EconPapers (8)

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Journal Article: 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:zbw:vfsc16:145883

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