Inferring quality from wait time
Kremer and Debo examine how waiting time affects purchasing when some consumers know a product's quality and others do not. Because informed consumers are present, waiting times signal quality to the uninformed: lower-quality products tend to have shorter waits and higher-quality ones longer. A long wait can therefore lead an uninformed shopper to think a product is better and still buy it, while a short wait can make them doubt its quality and leave anyway. The authors develop and test a theory of observational learning and find that informed consumers reduce uninformed purchases at short waits, even in small numbers. Purchase frequency may also rise with the wait.
Kremer and Debo examine how waiting time affects purchasing when some consumers know a product's quality and others do not. Because informed consumers are present, waiting times signal quality to the uninformed: lower-quality products tend to have shorter waits and higher-quality ones longer. A long wait can therefore lead an uninformed shopper to think a product is better and still buy it, while a short wait can make them doubt its quality and leave anyway. The authors develop and test a theory of observational learning and find that informed consumers reduce uninformed purchases at short waits, even in small numbers. Purchase frequency may also rise with the wait.
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Kremer, M., & Debo, L. G. (2016). Inferring quality from wait time. Management Science, 62(10), 3023-3038. doi:10.1287/mnsc.2015.2264