Something for the weekend

The longer the queue, the less money a customer is prepared to pay for a hamburger

The phrases time is money and every second counts, are familiar ones to most people, but researchers have found that these maxims really do have a ring of truth, at least when applied to the fast food industry.

Gad Allon, an associate professor of managerial economics and decision sciences at the Kellogg School of Management at Northwestern University, with colleagues Awi Federgruen, a professor of management at Columbia Business School and Margaret Pierson, an assistant professor of business administration at Tuck School of Business, Dartmouth, looked at hamburger drive-ins in Cook County, Illinois in the US.

They discovered that fast food customers place considerable value on the length of time that they have to queue for their burgers. The authors say that every additional second of waiting reduces the amount of money that customers are willing to pay for their burgers by at least four cents.

Using a combination of interviews, demographic and geographic data and game theory the authors found that “In the fast food drive through industry customers trade off price and waiting time”. While the academics had anticipated these results they were surprised both by the extent and the robustness of the results.

They suggest several stratagems that fast food franchises could use to reduce waiting times, from outsourcing the order-taking process to employing more staff and speeding up the food preparation through the use of technology.

How much is your customer’s time worth? can be read online at Kellogg Insight.

● Oxytocin or the love hormone as it is sometimes called is known to play a role in pair bonding, displays of affection tend to raise levels of the hormone. Now research into the hormone has revealed that increased levels of oxytocin make people more likely to alter their behaviour and beliefs to match that of others.

A team of academics led by Mirre Stallen, a PhD candidate at Rotterdam School of Management, Erasmus University asked male participants to assess the beauty of neutral abstract figures. While some individuals were given a placebo, others received a nasal spray containing oxytocin. Those participants who had been given the hormone were strongly influenced by what others in the group thought. So that if the group consensus was that the figure was attractive the individuals who had received the spray also found it attractive, whereas if the group gave the figure the thumbs down then so too did the participants. The researchers suggest that increased levels of the hormone lead to increased group conformity.

“By conforming to common behaviours and shared opinions of one’s own group or community, members benefit from the wisdom of the group as a whole and thus increase survival likelihood at both the personal and the group level,” says Ms Stallen.

The paper, Herding hormone, oxytocin stimulates in-group conformity is published in Psychological Science by Mirre Stallen and co-researchers; Carsten De Dreu, Shaul Shalvi, Ale Smidts and Alan Sanfey of Erasmus University Rotterdam, Radboud University Nijmegen and the University of Amsterdam.

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