The Flat-Rate Pricing Paradox: Conflicting Effects of "“All-You-Can-Eat"” Buffet Pricing

A-Tier
Journal: Review of Economics and Statistics
Year: 2011
Volume: 93
Issue: 1
Pages: 193-200

Authors (2)

David R Just (Cornell University) Brian Wansink (not in RePEc)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Are price and consumption independent in flat-rate price service contexts? A field experiment at an all-you-can-eat pizza restaurant shows that a 50%% discount on the price of the meal led customers to consume 27.9%% less pizza (2.95 versus 4.09 pieces). A second analysis indicated that individual taste ratings of this pizza tended to be inversely related to how much is consumed. One possible interpretation of these two findings is that individuals in a flat-rate (or fixed-price) context may consume the amount that enables them to get their money's worth rather than consuming until their marginal utility of consumption is 0. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Technical Details

RePEc Handle
repec:tpr:restat:v:93:y:2011:i:1:p:193-200
Journal Field
General
Author Count
2
Added to Database
2026-01-25