Spiegler Ran
- Published in print:
- 2011
- Published Online:
- September 2011
- ISBN:
- 9780195398717
- eISBN:
- 9780199896790
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195398717.003.0012
- Subject:
- Economics and Finance, Behavioural Economics
This chapter overviews themes that recur throughout the book: price complexity, spurious product differentiation, market transactions as a form of speculative trade, the role of consumer protection ...
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This chapter overviews themes that recur throughout the book: price complexity, spurious product differentiation, market transactions as a form of speculative trade, the role of consumer protection policies an other regulatory interventions, and the externalities between rational and boundedly rational consumersLess
This chapter overviews themes that recur throughout the book: price complexity, spurious product differentiation, market transactions as a form of speculative trade, the role of consumer protection policies an other regulatory interventions, and the externalities between rational and boundedly rational consumers
Ran Spiegler
- Published in print:
- 2011
- Published Online:
- September 2011
- ISBN:
- 9780195398717
- eISBN:
- 9780199896790
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195398717.001.0001
- Subject:
- Economics and Finance, Behavioural Economics
This book synthesizes recent developments in the theory of Industrial Organization, incorporating aspects of consumer psychology that are absent from the standard model of rational choice. The book ...
More
This book synthesizes recent developments in the theory of Industrial Organization, incorporating aspects of consumer psychology that are absent from the standard model of rational choice. The book analyzes three classes of market models in which profit-maximizing firms interact with boundedly rational consumers, each capturing a different aspect of bounded consumer rationality: dynamically inconsistent preferences and biased beliefs regarding future preferences, limited ability to understand price complexity, and reference-dependent choice. These models address questions such as: Can we explain observed pricing, marketing and product differentiation strategies as equilibrium responses consumers' bounded rationality? Do market forces protect boundedly rational consumers from being exploited by firms? What is the role of market regulation and consumer protection policies in this regard? How do firms discriminate between consumers according to differences in their rationality? The book is meant to serve as a textbook for graduate courses in microeconomic theory, industrial organization or behavioral economics.Less
This book synthesizes recent developments in the theory of Industrial Organization, incorporating aspects of consumer psychology that are absent from the standard model of rational choice. The book analyzes three classes of market models in which profit-maximizing firms interact with boundedly rational consumers, each capturing a different aspect of bounded consumer rationality: dynamically inconsistent preferences and biased beliefs regarding future preferences, limited ability to understand price complexity, and reference-dependent choice. These models address questions such as: Can we explain observed pricing, marketing and product differentiation strategies as equilibrium responses consumers' bounded rationality? Do market forces protect boundedly rational consumers from being exploited by firms? What is the role of market regulation and consumer protection policies in this regard? How do firms discriminate between consumers according to differences in their rationality? The book is meant to serve as a textbook for graduate courses in microeconomic theory, industrial organization or behavioral economics.
Spiegler Ran
- Published in print:
- 2011
- Published Online:
- September 2011
- ISBN:
- 9780195398717
- eISBN:
- 9780199896790
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195398717.003.0007
- Subject:
- Economics and Finance, Behavioural Economics
This chapter extends the analysis of competitive markets when consumers employ sampling-based reasoning to situations in which firms can use obfuscation strategies to create price complexity. It is ...
More
This chapter extends the analysis of competitive markets when consumers employ sampling-based reasoning to situations in which firms can use obfuscation strategies to create price complexity. It is shown that greater competition increases the equilibrium use of obfuscation, without lowering expected prices, and may even create production inefficiency. Consumer protection policies that introduce simple options may be counter-productive in terms of consumer welfare.Less
This chapter extends the analysis of competitive markets when consumers employ sampling-based reasoning to situations in which firms can use obfuscation strategies to create price complexity. It is shown that greater competition increases the equilibrium use of obfuscation, without lowering expected prices, and may even create production inefficiency. Consumer protection policies that introduce simple options may be counter-productive in terms of consumer welfare.
