Economics Seminar（2015-14）

Topic:Disappointment looms around the corner

Speaker:Lionel Page

Affiliation:Queensland University of Technology

Time: Friday, June 19 from 1:00-2:30pm

Location: Room 217, Guanghua Building 2

Abstract:

We investigate how restaurants can use high visibility location to charge higher prices or offer lower quality to customers who are imperfectly informed and face search costs. We use a large dataset of user reviews in 10 large cities in America and Europe. We find that prime locations in terms of visibility such as street intersections and touristic attractions are associated with substantial lower customer satisfaction. This result confirms predictions from economic models of search that the closer a restaurant is to a highly frequented area and the more visibility it has, the less it will have to rely on quality to attract customers.

Your participation is warmly welcomed!