Inattentive consumers and product quality
WebJul 5, 2012 · Inattentive Consumers and Product Quality Mark Armstrong Yongmin Chen Abstract This paper studies a model in which some consumers shop on the basis of price alone, without attention to potential differences in product quality. A firm may offer a low-quality product to exploit these inattentive consumers. WebFeb 10, 2014 · Using a standard strategic pricing game, I determine how sellers set prices when facing buyers who are “rationally inattentive” to information about product quality. Two cases are studied: strategically sophisticated buyers who are rationally inattentive to exogenous information about quality and strategically naïve buyers who are ...
Inattentive consumers and product quality
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Webthat is, controlling for movie quality, being #1 is associated with a $75 mil-lion increase in revenues, which is consistent with Proposition 1 . Testing Proposition 3. Proposition 3 states that, the greater the measure of inattentive consumers (parameter /), the greater the impact of being #1 through the awareness channel. WebSep 17, 2024 · We find that consumers that can gather and process information at approximately no cost rationally select to be attentive while consumers that must incur a cost rationally select to be inattentive.
WebA firm may offer a low-quality product to exploit these inattentive consumers. In the unique symmetric equilibrium of the model, firms choose prices with mixed strategies, similarly … WebIn some markets, consumers do not know the attributes of all the products that are available in the market, or the prices at which they are offered. To overcome this uncertainty, consumers may gather and process information about those attributes and prices.
WebJul 2, 2009 · In the unique symmetric equilibrium, firms follow a mixed strategy involving both price and quality dispersion. The presence of inattentive consumers harms attentive … WebA firm may offer a low-quality product to exploit these inattentive consumers. In the unique symmetric equilibrium of the model, firms choose prices with mixed strategies, similarly …
WebDownloadable! This paper studies a model in which some consumers shop on the basis of price alone, without attention to potential differences in product quality. A firm may offer a low-quality product to exploit these inattentive consumers. In the unique symmetric equilibrium of the model, firms choose prices with mixed strategies, similarly to Varian …
WebNov 1, 2013 · In this paper we incorporate consumer attentiveness, as well as the related endogenous search decision, into a model of quality disclosure. Our results suggest that firms should disclose less quality information as the share of partially informed consumers (informed about one firm but not the other) increases, or as consumer search costs … devops create inherited processWebDec 13, 2011 · The consumers have heterogeneous tastes for quality: for some consumers it is efficient to buy a high quality product, while for others it is efficient to buy a low quality product. In the symmetric equilibrium firms use mixed strategies that randomize both price and quality, and obtain strictly positive profits. devops cicd for sql serverWebJul 5, 2012 · A firm may offer a low-quality product to exploit these inattentive consumers. In the unique symmetric equilibrium of the model, firms choose prices with mixed … church in coorgWebA firm may offer a low-quality product to exploit these inattentive consumers. In the unique symmetric equilibrium of the model, firms choose prices with mixed strategies, similarly to Varian (1980) in which some consumers purchase from a … church incorporationWebInattentive Consumers and Product Quality Mark Armstrong and Yongmin Chen Journal of the European Economic Association, 2009, vol. 7, issue 2-3, 411-422 Abstract: We present … church in copenhagenWebThis paper examines the role of consumer preferences, costs, and price competition in determining the competitive product strategy of a firm. In the model studied here, there are two identical firms competing on product quality and price. They face consumers who prefer a higher quality product to a lower quality product, but differ in how much ... devops definition of epicWebThis paper presents a model in which some consumers shop on the basis of price alone, without attention to product quality. A firm may “cheat ” (i.e., cut quality) to exploit these … church in corinth history