Peer feedback can decrease consumers' willingness to pay for food: Evidence from a field experiment.

ABSTRACT

The vast majority of consumer products fail to attract sufficient consumer demand. Word of mouth marketing and online feedback from other consumers have become focal marketing strategies for many products as social media has increased the size of networks and amplified the impact of messages from other consumers. The current literature on the influence that consumer feedback can have on consumers' willingness to pay (WTP) for food products is mixed and often draws upon studies with small samples and hypothetical situations. This study investigates how this feedback can impact other consumers' food preferences using an economic field experiment involving 1,068 adult consumers who make choices on oysters, mushrooms, and chocolate. Results suggest that knowledge of peer preferences, such as the willingness to pay for similar products and/or how often they consume these products, caused a decrease (5%-9%) in consumers' willingness to pay.