Huck, Steffen and Zhou, Jidong (2011): Consumer behavioural biases in competition: A survey.
Preview |
PDF
MPRA_paper_31794.pdf Download (973kB) | Preview |
Abstract
This is a survey of studies that examine competition in the presence of behaviourally biased or boundedly rational consumers. It will tackle questions such as: How does competition and pricing change when consumers are biased? Can inefficiencies that arise from consumer behavioural biases be mitigated by lowering barriers to entry? Do biased consumers make rational ones better or worse off? And will biased consumer behaviour be overcome through learning or education?
Item Type: | MPRA Paper |
---|---|
Original Title: | Consumer behavioural biases in competition: A survey |
Language: | English |
Keywords: | Behavioural Economics, Industrial Organization, Biased Consumers |
Subjects: | D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory D - Microeconomics > D0 - General > D03 - Behavioral Microeconomics: Underlying Principles D - Microeconomics > D4 - Market Structure, Pricing, and Design L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance |
Item ID: | 31794 |
Depositing User: | Steffen Huck |
Date Deposited: | 23 Jun 2011 13:24 |
Last Modified: | 27 Sep 2019 02:49 |
References: | Akerlof, G. (1970) 'The market for lemons, quality uncertainty and the market mechanism', Quarterly Journal of Economics, 83(3), 488 – 500. Armstrong, M. and Vickers, J. (2001): 'Competitive Price Discrimination,' RAND Journal of Economics, 32(4), 579-605. Armstrong, M., Vickers, J. and Zhou, J. (2009): 'Prominence and consumer search', RAND Journal of Economics, 40, 209–233. Ausubel, L. (1991): 'The failure of competition in the credit card market', American Economic Review, 81(1), 50-81. Banks, J. and Oldfield, Z. (2007): 'Understanding Pensions: Cognitive Function, Numerical Ability and Retirement Saving', Fiscal Studies, 28: 143–170. Baye, Michael R., Rupert Gatti, Paul Kattuman, and John Morgan (2006): 'Did the Euro Foster Online Price Competition? Evidence from an International Price Comparison Site', Economic Inquiry, 44(2), 265-279. Becker, G.M., Degroth, M.H., Marashak, J. (1964): 'Measuring Utility by a Single-Response Sequential Method', Behavioral Science, 9(2). Bernheim (2009): 'Behavioural Welfare Economics', Journal of European Economic Association, 7(2-3), 267-319. Bertrand, M., D. Karlan, S. Mullainathan, E. Shafir, and J. Zinman (2009): 'What’s Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment,' Quarterly Journal of Economics, forthcoming. Bohnet.I, Hamgart.H, Huck.S and Tyran. J-R (2005):'Learning Trust', Journal of the European Economics Association, 3(2-3), 322-329. Bohnet.I, and Zeckhauser, R,( 2004). 'Trust, Risk and Betrayal.' Journal of Economic Behaviour and Organisation 55.4 (2004): 467-484. Burks, S., Carpenter, J., Gotte, L., and Rustichini, A.: (2008) 'Cognitive skills explain economic preferences, strategic behaviour and job attachment,' Discussion paper 3609, IZA. Carlin, B. (2009): 'Strategic price complexity in retail financial markets,' Journal of Financial Economics, 91 (3), 278-287. Chen, Y., G. Iyer, and A. Pazgal (2010): 'Limited Memory, Categorisation, and Competition,' Marketing Science, 29(4), 650-670. Chioveanu, I., and J. Zhou (2009): 'Price Competition with Consumer Confusion,' mimeo, UCL. Choi, J., D. Laibson, and B. Madarian (2008): 'Why Does the Law of One Price Fail? An Experiment on Index Mutual Funds,' mimeo, Yale and Harvard. DellaVigna, S. and U. Malmedier (2004): 'Contract Design and Self-Control: Theory and Evidence,' Quarterly Journal Economics, 119(2), 353-402. DellaVigna, S. and U. Malmendier (2006): 'Paying not to go to the Gym,' American Economic Review, 96(3), 694-719. Dow, J. (1992): 'Search Decisions with Limited Memory,' Review of Economic Studies, 58, 1-14. DG SANCO (2010): Consumer Decision-making in retail Investment Services: A behavioural Perspective, a report by N.Chater, R.Inderst and S.Huck. Dulleck.U, Kershbamer.R, and Sutter.M (2010): 'The Economics of Credence Goods: On the Role of Liability, Verifiability, Reputation and Competition,' forthcoming in American Economic Review. Eliaz, K. and R. Spiegler (2010): 'Consideration Sets and Competitive marketing,' forthcoming in Review of Economic studies. Eliaz, K. and R. Spiegler, (2006): 'Contracting with Diversely Naive Agents,' Review of Economic Studies, 73(3), 689-714. Ellison, G. (2005): 'A Model of Add-On Pricing,' Quarterly Journal of Economics, 120(2), 585-637. Ellison, G. and S. Ellison (2009) , 'Search, Obfuscation, and Price Elasticities on the Internet,' Econometrica, 77(2), 427-452. Ellison, G., and A. Wolitzky (2008): 'A Search Cost Model of Obfuscation,' mimeo, MIT. Gabaix, X., and D. Laibson (2006): 'Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets,' Quarterly Journal of Economics, 121(2), 505-540. Grubb, M. (2009): 'Selling to Overconfident Consumers,' American Economic Review, 99(5), 1770-1807. Hann and Moraga-Gonzalez (2009): 'Advertising for Attention in a Consumer Search Model', forthcoming in Economic Journal. Heidhues, P. and B. Koszegi (2008): 'Competition and Price Variation When Consumers are Loss Averse,' American Economic Review, 98(4), 1245-1268. Heidhues, P. and B. Koszegi (2010): 'Exploiting Naivete about Self-Control in the Credit Market,' forthcoming in American Economic Review. Huck, S, Luenser, G, and Tyran, J-R (2006): 'Competition Fosters Trust,' ELSE Working Paper 235 Huck,S, Luenser, G, and Tyran, J-R (2007): 'Pricing Trust,' ELSE Working Paper 257 Huck.S and Tyran,J-R (2007): 'Reciprocity, social ties, and competition in markets for experience goods', Journal of Socio-Economics, 2007, 36, 191-203 Kahneman and Tversky (1979): 'Prospect theory and analysis of chopice under risk' Econometrica, 47(2), 263 – 292. Kahneman, and Tversky (2000): Choices, Values, and Frames, Cambridge University Press. Kalayci, K. (2010): 'Price Complexity and Buyer Confusion in Posted Offer Markets,' mimeo. Kalayci, K. and J. Potters (2010): 'Buyer Confusion and Market Prices,' forthcoming in International Journal of Industrial Organization. Karle, H. and M. Peitz (2009): 'Pricing and Information Disclosure in Markets with Loss-Averse Consumers', mimeo. Karle, H. and M. Peitz (2010): 'Consumer Loss Aversion and the Intensity of Competition', mimeo. Keser, Claudia (1993): 'Some Results of Experimental Duopoly Markets with Demand Inertia,' Journal of Industrial Economics, 41, 133-151. Klemperer, P. (1987): 'Markets with Consumer Switching Costs,' Quarterly Journal of Economics, 102, 375-394. Laibson, D. (1997): Golden Eggs and Hyperbolic Discounting', Quarterly Journal of Economics, 112(2), 443 – 447. List, J. (2003): 'Does Market Experience Eliminate Market Anomalies?' Quarterly Journal of Economics, 118(1), 41-71. Miravete, E. (2003): 'Choosing the Wrong Calling Plan? Ignorance and Learning,' American Economic Review, 93(1), 297-310 OFT (2010) The Impact of price frames, a study by London Economics, Charlotte Duke, Steffen Huck and Brian Wallace. OFT (2011) Consumer Contracts Economics Framework. Perloff, J. and S. Salop (1985): 'Equilibrium with Product Differentiation,' Review of Economic Studies, 52(1), 107-120. Piccione, M., and R. Spiegler (2009): 'Price Competition with Limited Comparability,' mimeo, LSE and UCL. Rochet, J. and Stole, L. (2002): 'Nonlinear Pricing with Random Participation,' Review of Economic Studies, 69(1), 277-311. Rothschild and Stiglitz (1976): 'Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information', Quarterly Journal of Economics, 90(4), 629-649. Rosenthal .R. (1980) A Model in which an Increase in the Number of Sellers Leads to a Higher Price, Econometrica, 48(6),1575-1579. Rubinstein and Salant (2008): '(A,f): Choices with Frames,' Review of Economic Studies, 75, 1287-1296. Rubinstein and Salant (2008): '(A,f): Choices with Frames,' Review of Economic Studies, 75, 1287-1296. Salop, S, and Stiglitz, J(1977): 'Bargains and Ripoffs: A Model of Monopolistically Competitive Price Dispersion,' Review of Economic Studies, 44, 493-510. Sandroni, A. and F. Squintani (2007): 'Overconfidence, Insurance, and Paternalism,' American Economic Review, 97(5), 1994-2004. Scitovsky, T. (1950): 'Ignorance as a Source of Oligopoly Power,' American Economic Review, 40(2), 48-53. Selten, R (1965): 'Spieltheoretische Behandlung eines Oligopolmodells mit Nachfragetragheit,' Zeitschrift fur die gesamte Staatswissenschaft, 121, 301-324 and 667-689. Smallwood, D. and J. Conlisk (1979): 'Product Quality in Markets where Consumers are Imperfectly Informed,' Quarterly Journal of Economics, 93(1), 1-23. Spence, M. (1977): 'Consumer Misperception, Product Failure and Producer Liability' Review of Economic Studies, 44(3), 561-572 Spiegler,R. (2010): 'Bounded Rationality and Industrial Organisation', Oxford Economic Press. Spiegler, R. (2006a): 'The Market for Quacks,' Review of Economic Studies, 73(4), 1113-1131. Spiegler, R. (2006b): 'Competition over Agents with Boundedly Rational Expectations,' Theoretical Economics, 1(2), 207-231. Stahl, D. (1989) 'Oligopolistic Pricing with Sequential Consumer Search' The American Economic Review, 79(4), 700-712. Tversky and Kahneman (1991): Loss Aversion in Riskless Choice: A Reference-Dependent Model, Quarterly Journal of Economics, Vol. 106(4), 1039-1061 Tversky and Kahneman (1981): 'The Framing of Decisions and the Psychology of Choice,' Science, 211, 453-458. Varian, Hal R. (1980): 'A Model of Sales,' American Economic Review 70, 651-659. Wilson, C. (2010): 'Ordered Search and Equilibrium Obfuscation,' International Journal of Industrial Organisation, 28(5), 496-506. Zhou, J. (2008): 'Advertising, Misperceived Preferences, and Product Design,' mimeo, UCL. Zhou, J. (2008): 'Reference Dependence and Market Competition,' forthcoming in Journal of Economics & Management Strategy. Zhou, J. (2010): 'Multiproduct Search,' mimeo, UCL. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/31794 |