The Power of Apology

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.

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Year of publication:	2009-06
Authors:	Abeler, Johannes ; Calaki, Juljana ; Andree, Kai ; Basek, Christoph
Institutions:	Centre for Decision Research and Experimental Economics (CeDEx), School of Economics
Subject:	Apology \| Credulity \| Natural Field Experiment

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Extent:	application/pdf
Series:	Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 2009-12
Classification:	C93 - Field Experiments ; D82 - Asymmetric and Private Information ; L81 - Retail and Wholesale Trade; Warehousing
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010552233