The effect of name letter on market prices: Field experiments on seller behavior

Abstract

The name letter effect—that people's choices are affected by the similarity between the first letter of the choice and the chooser's own first name letter—has been documented in multiple consumer behavior fields. However, little is known about its impact on the supply side of the market, that is, on seller behavior. Hence, this study utilizes field experiments in which sellers on a second-hand online platform are approached with distinct names to analyze their responses. The results show that sellers change the offered price of second-hand products sold on online platforms based on the customer's name. The results suggest that, on average, sellers agree to reduce the selling price more when approached by a consumer with a name that starts with the same letter and that the economic value of the name letter effect is approximately 3.5–5% of the product's initial requested price. Notably, the results are robust when examined with both between- and within-subject designs and when analyzing sellers' reactions to customers approaching them anonymously.