Is the second-cheapest wine a rip-off?
De Meza, D.
& Pathania, V. S.
(2021).
Is the second-cheapest wine a rip-off?
Economics Letters,
205,
https://doi.org/10.1016/j.econlet.2021.109965
& Pathania, V. S.
(2021).
Is the second-cheapest wine a rip-off?
Economics Letters,
205,
https://doi.org/10.1016/j.econlet.2021.109965
The second-cheapest bottle on a restaurant wine list is widely thought to be priced to exploit naïve diners embarrassed to choose the cheapest option. This paper investigates whether this behavioral theory holds empirically. We find that the mark-up on the second-cheapest wine is significantly below that on the four next most expensive wines. It is therefore an urban myth that the second-cheapest wine is an especially bad buy.
