“Extra bacon?” context effects in purchases of additional items

Brunner, Philipp; Zihlmann, Christian

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Research report

“Extra bacon?” context effects in purchases of additional items

BP2-STS

2024

59 p.

Additional products and services

English A common and seemingly innocuous practice involves offering optional extra items during the purchasing process. We study such a market with consumers whose preferences for the extra are sensitive to the context of the more expensive base product, making the extra offer appear more attractive than it actually is. The presence of context-sensitive consumers can soften competition in the market for the base product, making the base product more expensive than in a standard economy. This not only jeopardizes their own surplus but also creates a negative externality on the surplus of the other consumers who have standard preferences.

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