“ In Vino Veritas ” — But What , In Truth , Is In the Bottle ? Experience Goods , Fine Wine Ratings , and Wine Knowledge

Purpose: Fine wines challenge the consumer to know them and form a meaningful willingness to pay (WTP) for them. Given the wine consumer’s problem of knowing what she is buying, Nelson’s (1970) idea of “experience goods” might apply—goods that must be “experienced” to be accurately evaluated. Lacking own knowledge, consumers might use expert opinion to guide their WTP. However, the evidence of correlation between expert opinion and WTP is uneven. We question whether fine wine is an experience good and whether it can be known vicariously through ratings. The idea that one can know a fine wine by buying one—like knowing refrigerators by buying one (Nelson’s example)—seems misplaced, and the experience of others , including the seller, is also of limited value. Approach: The paper considers and critiques the expert information available to the consumer as well as other factors that complicate the consumer’s knowing what s/he will find in the bottle. It provides a detailed critique of the variety and structure of wine ratings. Findings: The critique of wine ratings—each implicitly a weighted average score of often unidentified characteristics with unspecified weights—demonstrates the difficulty of comparing or even understanding them. That result and the philosophical problem of knowing wine raise doubt about treating them as knowledge. Practical implications: Given the considerable expense often involved, consumers are eager to reduce their perceived risk by knowing what they are buying before they arrive at WTP for fine wine. Experts offer to fill that void, but consumers should be skeptical. The paper closes with a re-characterization of the consumer’s wine purchase decision.