Money-Back Guarantees and the Value of Decision Time: An Empirical Analysis
نویسندگان
چکیده
This paper uses the disappointment aversion and prospect theory to estimate consumers’ valuation of basic 30-day money-back guarantees (MBGs). We test how this valuation changes when the duration of MBGs vary, risk increases (store versus catalog), and return options change (store credit versus cash back) using data collected in Northern California. Our results confirm that individuals do not evaluate MBGs using expected benefit calculations but rather amplify its value similar to disappointment and regret anticipation effects.
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