Repairing the Damage: The Effect of Price Knowledge and Gender on Auto Repair Price Quotes

Abstract

In this paper we investigate whether sellers treat consumers di↵erently on the basis of how well informed consumers appear to be. We implement a large-scale field experiment in which callers request price quotes from automotive repair shops. We show that sellers alter their initial price quotes depending on whether consumers appear to be correctly informed, uninformed, or misinformed about market prices. We find that repair shops quote higher prices to callers who cite a higher benchmark price. We find that women are quoted higher prices than men when callers signal that they are uninformed about market prices. However, gender di↵erences disappear when callers mention a benchmark price for the repair. Finally, we find that repair shops are more likely to o↵er a price concession if asked to do so by a woman than a man.

The Differential Effect of Local–Global Identity Among Males and Females: The Case of Price Sensitivity

“…Marketing scholars have examined gender identity for its theoretical relevance as well as its managerial importance as a basis of customer segmentation (Argo and Dahl 2017; Busse, Israeli, and Zettelmeyer 2017; Meyners et al 2017; Otterbring et al 2018; Puccinelli, Chandrashekaran, and Grewal 2013). Although early research examined the communal-agentic dimension of gender identity (Bakan 1966; Winterich, Mittal, and Ross 2009), recent research has focused on the relational interdependence versus collective interdependence aspects of gender identity (Meyers-Levy and Loken 2015).…”

Factors influencing customer loyalty in 3rd party automotive shops

“…Trust is important because customers will feel secure knowing that their vehicles are safe and the vehicles will perform well without breaking down. Generally speaking, women are less likely to know about automobile repairs and services and some service centers may take advantage of this fact by overcharging or offering services that are not required (Busse, Israeli, & Zettelmeyer, 2017). However, once trust is gained, female customers are more likely to become loyal to a shop as compared to men (Canada Post Marketing Research, 2008).…”

“…However, once trust is gained, female customers are more likely to become loyal to a shop as compared to men (Canada Post Marketing Research, 2008). Interestingly, repair shops, when asked to do so, offer women more discounts for services then men (Busse et al, 2017). In any event, men are thought to be more adventurous and will try multiple shops before committing to one (Schneider, 2002).…”

“…In general, customers should be treated well so that they will trust the automotive shop with their vehicles, with the expectation that the vehicles will be returned in a better condition than before. Generally speaking, women are less likely to know about automobile repairs and services and therefore, their expectations are high (Busse et al, 2017). However, if their expectations are met, they are likely to come back (Renfrew Chrysler, 2017).…”

Is Behavioral Ethics Ready for Giving Business and Policy Advice?

“…Firms could implement measures to limit unethical behavior by making it impossible-for example, if customers didn't have to state their gender, price discrimination of women in car repairs could not occur (Busse, Israeli, & Zettelmeyer, 2017); firms could design software implementations and administrative processes lowering the occurrence of dishonest behavior (Derfler-Rozin, Moore, & Staats, 2016). Also, formal ethical systems of firms are highly effective when employees feel strong "informal" push to wrongdoing (Smith-Crowe et al, 2014).…”