Behavioral industrial organization, firm strategy, and consumer economics

Azar, Ofer H. (2006): Behavioral industrial organization, firm strategy, and consumer economics. Unpublished.

Abstract

The field of behavioral economics is one of the fastest-growing fields in economics in recent years. Not long ago this was a small field, but over the last decade or so, the field gained more recognition, and today it seems clear that psychological motivations and biases affect economic behavior in many important ways. Insights from psychology were incorporated in several areas of economics. This paper offers a short review of the application of behavioral economics to industrial organization, which can be denoted “behavioral industrial organization,” and on the relationship between behavioral industrial organization, firm strategy, and consumer economics.

• Item Type: MPRA Paper
• Institution: Ben-Gurion University of the Negev
• Language: English
• Keywords: industrial organization; behavioral economics; strategy; firm strategy; business strategy; economic psychology; behavioral industrial organization; consumer behavior; consumer economics
• Subjects: D - Microeconomics > D4 - Market Structure and Pricing > D40 - General; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L10 - General; M - Business Administration and Business Economics; Marketing; Accounting > M2 - Business Economics > M20 - General; A - General Economics and Teaching > A1 - General Economics > A12 - Relation of Economics to Other Disciplines; M - Business Administration and Business Economics; Marketing; Accounting > M3 - Marketing and Advertising > M30 - General; D - Microeconomics > D1 - Household Behavior and Family Economics > D10 - General
• References: Azar, Ofer H. (2005), "Firm Strategy and Biased Decision Making: The Price Dispersion Puzzle," working paper, Ben-Gurion University of the Negev.; DellaVigna, Stefano and Ulrike Malmendier (2004), “Contract Design and Self-Control: Theory and Evidence,” Quarterly Journal of Economics 119, 353-402.; DellaVigna, Stefano and Ulrike Malmendier (2006), “Paying Not to Go to the Gym,” American Economic Review 96, 694-719.; Ellison, Glenn (forthcoming), “Bounded Rationality in Industrial Organization,” in Richard Blundell, Whitney Newey, and Torsten Persson (eds.), Advances in Economics and Econometrics: Theory and Applications, Ninth World Congress, Cambridge University Press (also posted online at http://eswc2005.econ.ucl.ac.uk/papers/ESWC/2005/2735/WCEllison.pdf).; Gabaix, Xavier and David Laibson (2006), “Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets,” Quarterly Journal of Economics 121, 505-540.; Levy, Daniel, Haipeng Allan Chen, Sourav Ray, and Mark Bergen (2005), "Asymmetric Price Adjustment in the Small: An Implication of Rational Inattention,” Working Paper, Bar-Ilan University and Emory University.