Consumer Choice, Imperfect Information, and Public Policy
Author : Victor P. Goldberg
Publisher :
Page : 58 pages
File Size : 20,94 MB
Release : 1973
Category : Consumer education
ISBN :
Author : Victor P. Goldberg
Publisher :
Page : 58 pages
File Size : 20,94 MB
Release : 1973
Category : Consumer education
ISBN :
Author : Howard Beales
Publisher :
Page : 34 pages
File Size : 38,94 MB
Release : 1980
Category : Consumer education
ISBN :
Author : William J. Congdon
Publisher : Brookings Institution Press
Page : 260 pages
File Size : 26,73 MB
Release : 2011
Category : Business & Economics
ISBN : 0815704984
Argues that public finance--the study of the government's role in economics--should incorporate principles from behavior economics and other branches of psychology.
Author : William L. Wilkie
Publisher :
Page : 90 pages
File Size : 18,77 MB
Release : 1975
Category : Consumer protection
ISBN :
Author : Ran Kivetz
Publisher :
Page : 57 pages
File Size : 10,57 MB
Release : 2000
Category : Consumers' preferences
ISBN :
Author : University of California, Davis. Institute of Governmental Affairs
Publisher :
Page : 58 pages
File Size : 18,89 MB
Release : 1973
Category : California
ISBN :
Author : Frank Hüttner
Publisher :
Page : pages
File Size : 20,70 MB
Release : 2016
Category :
ISBN :
Consumers often do not have complete information about the choices they face and therefore have to spend time and effort in acquiring information. Since information acquisition is costly, consumers have to trade-off the value of better information against its cost, and make their final choices based on imperfect information. We model this decision using the rational inattention approach and describe the rationally inattentive consumer's choice behavior when she faces options with different information costs. To this end, we introduce an information cost function that distinguishes between direct and inferential information. We then analytically characterize the optimal behavior and derive the choice probabilities in closed-form. We find that non-uniform information costs can have a strong impact on product choice, which gets particularly conspicuous when the product alternatives are otherwise very similar. It can also lead to situations where it is disadvantageous for the seller to provide easier access to information for a particular product. Furthermore, it provides a new explanation for strong failure of regularity of consumer behaviour, which occurs if the addition of an inferior - never chosen - product to the choice set increases the market share of another existing product.
Author : Frank Huettner
Publisher :
Page : 52 pages
File Size : 12,98 MB
Release : 2018
Category :
ISBN :
Consumers often do not have complete information about the choices they face and therefore have to spend time and effort in acquiring information. Since information acquisition is costly, consumers trade-off the value of better information against its cost, and make their final product choices based on imperfect information. We model this decision using the rational inattention approach and describe the rationally inattentive consumer's choice behavior when she faces alternatives with different information costs. To this end, we introduce an information cost function that distinguishes between direct and implied information. We then analytically characterize the optimal choice probabilities. We find that non-uniform information costs can have a strong impact on product choice, which gets particularly conspicuous when the product alternatives are otherwise very similar. There are significant implications on how a seller should provide information about its products and how changes to the product set impacts consumer choice. For example, non-uniform information costs can lead to situations where it is disadvantageous for the seller to provide easier access to information for a particular product, and to situations where the addition of an inferior (never chosen) product increases the market share of another existing product (i.e., failure of regularity). We also provide an algorithm to compute the optimal choice probabilities and discuss how our framework can be empirically estimated from suitable choice data.
Author : Florian Baumann
Publisher :
Page : 0 pages
File Size : 42,63 MB
Release : 2021
Category :
ISBN :
This paper shows that the provision of consumer rights can decrease welfare when some consumers remain ignorant of these rights. We find that consumers uninformed about a mandated warranty demand excessively safe products in some circumstances. In other circumstances, uninformed consumers buy the efficient product variety like informed consumers but the former cross-subsidize the latter via firms' pricing. With respect to the salient policy option of improving information about consumer rights, we find that increasing the share of informed consumers may actually raise the risk of inefficiency.
Author : U.S. Office of Consumer Affairs
Publisher :
Page : 8 pages
File Size : 23,28 MB
Release : 1992-02
Category : Consumer protection
ISBN :