Drip Pricing When Consumers Have Limited Foresight: Evidence from Driving School Fees

• 成果类型: Article
• 署名作者: Seim, Katja; Vitorino, Maria Ana
• 署名单位: Center for Economic & Policy Research (CEPR); Yale University; National Bureau of Economic Research; INSEAD Business School
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.70011
• 发表日期: 2025
• 关键词: information suppression; shrouded attributes; self-control; SALIENCE; COMPETITION; MARKET; MODEL

摘要

This article empirically examines the drip pricing behavior of firms, where consumers purchase a base product and may later buy an add-on, often without anticipating the need for it. A loss leader pricing strategy emerges, with firms pricing the base product below, and the add-on above, standalone levels. Using data from the Portuguese driving instruction market, we find that base course prices decrease with competition, while prices for add-on repeat courses do not. A survey reveals that at least 25% of students are inattentive to repeat fees, driven by underestimating failure rates and being unaware of repeat test costs.