How do people value extended warranties? Evidence from two field surveys
Huysentruyt and Read, Journal of Risk and Uncertainty 40(3), 2010, 197-218. Two field surveys. Consumers greatly overestimate the likelihood of breakage and repair cost, but this does not fully explain extended warranty purchases. Purchases track the severity of consequences of going uninsured, not their probability. Expected emotional benefit of holding a warranty was the strongest predictor of buying and of willingness to pay. Higher cognitive skills reduced overestimation of economic factors, but emotion still weighed heavily. No sample size or figures stated in the abstract.
Huysentruyt and Read, Journal of Risk and Uncertainty 40(3), 2010, 197-218. Two field surveys. Consumers greatly overestimate the likelihood of breakage and repair cost, but this does not fully explain extended warranty purchases. Purchases track the severity of consequences of going uninsured, not their probability. Expected emotional benefit of holding a warranty was the strongest predictor of buying and of willingness to pay. Higher cognitive skills reduced overestimation of economic factors, but emotion still weighed heavily. No sample size or figures stated in the abstract.
Written from the abstract (LSE repository), 2026-11-10.
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Huysentruyt, M., & Read, D. (2010). How do people value extended warranties? Evidence from two field surveys. Journal of Risk and Uncertainty, 40(3), 197-218. doi:10.1007/s11166-010-9094-9 https://doi.org/10.1007/s11166-010-9094-9