An Empirical Investigation of the Influence of Information on Reference Prices for Public Swimming Pools

Abstract

The impact of supplying contextual information on the reference price for public swimming pools was investigated. Three randomly assigned groups received different information treatments and a control group received no information. The information given to the three treatment groups was (1) the cost of service delivery; (2) the price charged by a private competitor; and (3) both service delivery cost and the private competitor's price. Provision of this information led to a substantially higher reference price in each of the three treatment groups when compared to the control group.