J 2022

JUDGEMENT BIAS AND CONSUMER WILLINGNESS TO PAY: EMPIRICAL STUDY

KUBALOVÁ, Radka and Martin KLEPEK

Basic information

Original name

JUDGEMENT BIAS AND CONSUMER WILLINGNESS TO PAY: EMPIRICAL STUDY

Authors

KUBALOVÁ, Radka (203 Czech Republic, belonging to the institution) and Martin KLEPEK (203 Czech Republic, guarantor, belonging to the institution)

Edition

Acta academica karviniensia, Karviná, Obchodně podnikatelská fakulta v Karviné, 2022, 2533-7610

Other information

Language

English

Type of outcome

Article in a journal

Field of Study

50204 Business and management

Country of publisher

Czech Republic

Confidentiality degree

is not subject to a state or trade secret

References:

RIV identification code

RIV/47813059:19520/22:A0000315

Organization unit

School of Business Administration in Karvina

Keywords in English

consumer behaviour; context; covid-19; insurance; irrationality; willingness to pay
Changed: 11/4/2023 20:56, Miroslava Snopková

Abstract

In the original language

The recent COVID-19 pandemic brought the focus on the shift in the consumer habits, consumption and spending, as well as the new sides consumers‘ (ir)rationality, especially in the terms of the panic stock-up purchases and herd behaviour. In this paper, we use the COVID-19 crisis as an opportunity to empirically test the bias in the consumer judgments. Using a simple survey experiment among college students, the difference in their willingness to pay monthly for a life insurance under the COVID-19 frame and general, non-COVID-19 frame is examined. According to the obtained results, it was found out the subjects were willing to pay higher amount for the insurance when the question was framed by the COVID-19 context. This result generally supports the previously found empirical evidence on the influence of the judgment heuristics, importance of the context frame and the consumer irrationality. Practical implications for small and medium enterprises are discussed at the end of the paper.