Department of Economics
Massachusetts Institute of Technology
Cambridge, MA 02141
Institutional Affiliation: Massachusetts Institute of Technology
NBER Working Papers and Publications
|March 2019||Toward an Understanding of the Economics of Apologies: Evidence from a Large-Scale Natural Field Experiment|
with Benjamin Ho, John A. List, Ian Muir: w25676
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.