Retailers selling home appliances and electronics goods typically make 15-20 percent profit from these products but realize more than 200 percent profit from selling extended warranties for them. A new study that appears in the January issue of Marketing Science, a publication of the Institute for Operations Research and the Management Sciences (INFORMS), finds that even though selling warranties through independent firms will lower extended warranty prices, the consumers may actually be worse off.

The research, Risk Preferences and Demand Drivers of Extended Warranties, was conducted by Pranav Jindal, assistant professor of marketing at Pennsylvania State University's Smeal College of Business.

Combining conjoint analysis, one of the most widely used market research tools, with economic models, Jindal analyzed stated choices of more than 550 consumers drawn from an online panel, and addressed two key questions -- "Why do consumers buy extended warranties?" and "Why do consumers pay such a high premium for extended warranties?"

"Paying $500 for a new laptop is not the same as paying $500 for repairing or replacing a laptop you already own," Jindal said. "Consumers view paying for repairs as a loss. Consumers feel it hurts 3-4 times worse than paying the price of the product itself. This hurt drives consumers to buy extended warranties."

This behavior of consumers is called loss aversion.

Through an online survey, the author collected data on consumer choices for washing machines and extended warranties to show that loss aversion along with peace of mind are the key reasons why consumers buy extended warranties for their products.

"Consumers search for low product prices but do not search for low warranty prices," says Jindal. "So, they are locked in by retailers selling appliances and electronic goods. Conventional wisdom says that extended warranties should be sold through independent firms selling only warranties, which will make extended warranties cheaper and consumers better off. But according to this new research, obtaining extended warranties through independent firms may be cheaper but it does not make consumers happier."

This unexpected result is based on the finding that retailers discount the price of home appliances and electronic goods and in turn charge consumers a premium for extended warranties. If these retailers are not allowed to sell extended warranties, then prices of home appliances and electronic goods will go up, although extended warranties (now sold through independent retailers) will become cheaper. On average, however, consumers lose more from the increased product prices than they gain from lower extended warranty prices.

While the study focused on the role of losses, it acknowledged that other factors such as over-predicting failure rate, lack of information about repair and replacement policy, and financial constraints may also result in consumers purchasing extended warranties.

"Consumers may buy a warranty for a variety of reasons. Controlling for others, this study shows that consumers' perception of potential losses and peace of mind are important factors, and have important implications for how extended warranties should be sold," Jindal concluded. "Moving forward, it would be really interesting to get into the consumer's mind and understand when they think a product will fail and how much they believe it will cost them to repair or replace the product."

View post:
Selling extended warranties via independent companies lowers price but hurts consumers: INFORMS

Willowbrook IL Commercial Locksmith
http://yourchicagogaragedoor.com/willowbrook (630) 246-2821 Garage door, which in many cases are overlooked, is a valuable part of your home security system that keep potential burglars and...

By: Master Locksmith

See the article here:
Willowbrook IL Commercial Locksmith - Video

Streamwood IL Commercial Locksmith
http://yourchicagogaragedoor.com/streamwood (630) 246-2821 Garage door, which in many cases are overlooked, is a valuable part of your home security system that keep potential burglars and...

By: Master Locksmith

View original post here:
Streamwood IL Commercial Locksmith - Video

Wheaton IL Commercial Locksmith
http://yourchicagogaragedoor.com/wheaton (630) 246-2821 Garage door, which in many cases are overlooked, is a valuable part of your home security system that keep potential burglars and thieves...

By: Master Locksmith

Go here to read the rest:
Wheaton IL Commercial Locksmith - Video

OVERLAND PARK, Kan. When winter weather hits, the first place youll turn is the thermostat. But the furnace warm up has heating technicians working overtime. Theyre answering service calls for furnaces feeling the heat.

Whether your home is heated by a wood-burning fireplace, a gas furnace or some other service, there are preparations you need to make before winter weather hits hard.

On Friday power tools rang as loudly as Kevin Baileys phone did. Bailey is a service tech with Anthony Plumbing, Heating and Cooling, and hes dispatched to repair many furnaces each day.

Bailey says changing the filters in your furnace every few months can lengthen to time between unforeseen house calls.

Dirt causes about 60 percent of problems, maybe 60 to 80 percent of problems with furnaces and also with AC during the summertime, he explained.

On the fireplace front, Chris Loving is also a man in demand, sweeping and inspecting chimneys for Fluesbrothers Chimney Service.

Were booked out for a couple of weeks right now, Loving said.

Loving said its recommended that regularly-used chimneys get an annual inspection. He recommends fireplace-users stick with dry, split, seasoned wood, and those chimney sweeping logs arent enough to keep your home secure.

Theyre like chewing Trident. Theyre OK to use in conjunction with the sweep. They dont substitute or replace the sweeping action, he said.

Loving says a typical sweep and inspection will cost you $250. He also emphasized safety while using a wood-burning fireplace. He cited national statistics that show as many as three-quarters of all chimney fires are caused by failure to have that chimney serviced.

Visit link:
With winter in full swing, heating technicians respond to rush of service calls

Portland police arrested a 59-year-old handyman last week who they say scammed at least four customers by charging them for work he never completed.

Clinton Timothy Reany, who police say also goes by Dan Reany or Rick Mintkenbaugh, was arrested Wednesday by Portland Police Bureau detectives assigned to the bureau's elder crimes unit.

Sgt. Pete Simpson, a bureau spokesman, said Reany allegedly would contact homeowners and offer to repair sidewalks or driveways for a fee.

He would then collect half the fee for the job, perform a little work, ask for more money and then leave before completing the job. He often left the property damaged after allegedly pocketing thousands of dollars.

Simpson said Reany allegedly has repeated the scam for nearly 40 years across the country, operating under the business name of Concrete Solutions orConcrete Plus and targeting the elderly.

The Star-News in Wilmington, North Carolina reports that Reany wasconvicted of scamming about a dozen people and sent to prison in 2007.

On its website, the North Carolina Department of Public Safetylists Reany's arrests dating back to 2004 for similar offenses.

Reany's Lincoln Continental with North Carolina license plates was seized following his arrest.

Reanywas booked into the Justice Center Jail on Sunday on accusations of two counts of identity theft, and one count of methamphetamine possession, with bail set at $15,000.

Anyone who believes they may have been victimized by Reany or has additional information about him is asked to call Detective Teresa Uttke at 503-823-0969.

Go here to see the original:
Portland police elder crimes detectives arrest 'handyman' on accusations of fraud

mini1
Gutter cleaning,repairing,installation,window,patio,driveway, conservatory,fascia,soffit,garden cleaning in Hertfordshire and North London.

By: Washforcall Ltd.

Originally posted here:
mini1 - Video

Feng Shui 2 - Kris #39; Scream (Playback Version)
Feng Shui 2 - Kris #39; Scream: From the Movie "Feng Shui 2014" You can make this as a ringtone!! HEHEHE!!!

By: Paulo A. Bollosa

Read the original post:
Feng Shui 2 - Kris' Scream (Playback Version) - Video

Bhavishyavani | January 5, 2015 - India TV
SUBSCRIBE to Official India TV YouTube Channel Here: https://www.youtube.com/user/IndiaTV?sub_confirmation=1 Watch BHAVISHYAVANI with Acharya Indu Prakash, who tells your daily horoscope ...

By: IndiaTV

View post:
Bhavishyavani | January 5, 2015 - India TV - Video

Let #39;s Play SimCity :: S2 EP4 :: Lazer Fences
Having the urge to play a lot of SimCity again, I picked up all of the expansions and content packs. Now, we #39;re diving right in with a new city in a new regi...

By: Ruarc88

Read the original post:
Let's Play SimCity :: S2 EP4 :: Lazer Fences - Video