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Toward an Understanding of the Economics of Apologies: Evidence from a Large-Scale Natural Field Experiment

Basil Halperin, Benjamin Ho, John A. List, Ian Muir

NBER Working Paper No. 25676
Issued in March 2019
NBER Program(s):Industrial Organization Program, Productivity, Innovation, and Entrepreneurship Program

We use a theory of apologies to design a nationwide field experiment involving 1.5 million Uber ridesharing consumers who experienced late rides. Several insights emerge from our field experiment. First, apologies are not a panacea: the efficacy of an apology and whether it may backfire depend on how the apology is made. Second, across treatments, money speaks louder than words – the best form of apology is to include a coupon for a future trip. Third, in some cases sending an apology is worse than sending nothing at all, particularly for repeated apologies. For firms, caveat venditor should be the rule when considering apologies.

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Document Object Identifier (DOI): 10.3386/w25676

 
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