Acta academica karviniensia 2022, 22(1):87-94 | DOI: 10.25142/aak.2022.007

JUDGEMENT BIAS AND CONSUMER WILLINGNESS TO PAY: EMPIRICAL STUDY

Radka Kubalová, Martin Klepek
Silesian University, School of Business Administration, Univerzitní nám. 1934/3, 733 40 Karviná

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.

Keywords: consumer behaviour, context, covid-19, insurance, irrationality, willingness to pay.
JEL classification: D91, M39

Received: January 31, 2021; Revised: June 7, 2021; Accepted: May 18, 2022; Published: May 25, 2022  Show citation

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Kubalová R, Klepek M. JUDGEMENT BIAS AND CONSUMER WILLINGNESS TO PAY: EMPIRICAL STUDY. Acta academica karviniensia. 2022;22(1):87-94. doi: 10.25142/aak.2022.007.
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