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- Title
THE FLAT-RATE PRICING PARADOX: CONFLICTING EFFECTS OF "ALL-YOU-CAN-EAT" BUFFET PRICING.
- Authors
Just, David R.; Wansink, Brian
- Abstract
Are price and consumption independent in flat-rate price service contexts? A field experiment at an all-you-can-eat pizza restaurant shows that a 50% discount on the price of the meal led customers to consume 27.9% less pizza (2.95 versus 4.09 pieces). A second analysis indicated that individual taste ratings of this pizza tended to be inversely related to how much is consumed. One possible interpretation of these two findings is that individuals in a flat-rate (or fixed-price) context may consume the amount that enables them to get their money's worth rather than consuming until their marginal utility of consumption is 0.
- Subjects
FLAT rates; BUFFET restaurants; PRICING; CONSUMER behavior; FOOD consumption; PIZZERIAS; CONSUMER preferences; UTILITY functions; CONTROL groups; TOBITS; SUNK costs
- Publication
Review of Economics & Statistics, 2011, Vol 93, Issue 1, p193
- ISSN
0034-6535
- Publication type
Article
- DOI
10.1162/REST_a_00057