IMCA Research Seminar- Reto Odermatt, University of Basel

Beware of Good Alternatives: The Negative Effect of Opportunity Cost on Post-Choice Satisfaction

Absract

A fundamental assumption in consumer behavior is that opportunity cost is only relevant in the decision-making process and does not matter for utility once the decision is made. In this study, we question this assumption and consider the possibility that opportunity cost can negatively impact the satisfaction derived from a chosen option. In a series of hypothetical and real choice experiments, we provide evidence that opportunity cost significantly decreases consumers’ happiness after the choice.

Bio

Reto Odermatt is a senior research associate at the at the Faculty of Business and Economics of the University of Basel. After obtaining is doctorate he held positions at the London School of Economics and the University of Chicago, financed by a fellowship from the Swiss National Science Foundation. Reto conducts research using data on subjective well-being in the interdisciplinary field linking economics, psychology, health, public policy, and consumer research. He is also teaching “Economics of Well-Being” in the Master in Marketing and Transformative Economy at USI.