Inattentive consumers and product quality

Author: lonc

August undefined, 2024

WebIn our model, inattentive consumers are unsophisticated and make no attempt to infer quality from a supplier's price.2 Indeed, a firm's price completely reveals its choice of quality in equilibrium, and a Bayesian consumer could infer quality even if she cannot observe it … WebMay 1, 2012 · We study a market with rationally inattentive consumers who are unsure of the terms of the offers made by firms, but can acquire information about the terms at a …

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WebWhen consumers have heterogeneous costs of information, firms selling low-quality products may choose to set the highest prices. Citation Matějka, Filip, and Alisdair McKay. 2012. "Simple Market Equilibria with Rationally Inattentive Consumers." American Economic Review, 102 (3): 24-29. DOI: 10.1257/aer.102.3.24 WebMay 25, 2024 · We model customer choice based on the theory of rational inattention in the economics literature, which enables us to capture not only the impact of true quality and price, but also the intricate effects of customer’s prior beliefs and cost of information acquisition and processing. graphite onyx

Inattentive Consumers and Product Quality - Research Papers in …

WebThis 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 ... WebThe presence of inattentive consumers allows ﬁrms to earn positive proﬁts, even thoughthereisonlyoneproductwhichhaspositivesocialvalue. Thefactthatﬁrms … WebA firm may “cheat” and offer a worthless product to exploit these inattentive consumers. In the unique symmetric equilibrium, firms follow a mixed strategy involving both price and quality dispersion. The presence of inattentive consumers harms attentive consumers, and enables firms to earn positive profits. chi set flyff

Strategic Pricing with Rational Inattention to Quality - SSRN

(PDF) Endogenous Product Design and Quality When Consumers …

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. WebThis 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 … graphite optical propertiesWebCiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): This paper studies a model in which some consumers shop on the basis of price alone, without … chise stormstones

"WebThe presence of inattentive consumers harms attentive consumers, and enables firms to earn positive profits. With many sellers, approximately half of them will cheat. A market … " - Inattentive consumers and product quality

Inattentive consumers and product quality

MPRA Munich Personal RePEc Archive Inattentive Consumers and Product …

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 to Varian (1980) in which some consumers purchase from a … WebInattentive Consumers and Product Quality∗ - Economics. EN. English Deutsch Français Español Português Italiano Român Nederlands Latina Dansk Svenska Norsk Magyar …

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WebThis 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 (1980) in which … WebThis 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 …

WebInattentive 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 … WebAug 15, 2016 · The Demand for Natural Food Products. Clean labels are very popular throughout the industry and the demand for simple ingredients is influencing the sales of …

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 … WebMar 10, 2024 · Product quality refers to how well a product satisfies customer needs, serves its purpose and meets industry standards. When evaluating product quality, …

Web2 days ago · Whether the Nutri-Score algorithm – which ranks food from -15 for the ‘healthiest’ products to +40 for those that are ‘less healthy’ – is the most effective at helping consumers make healthier choices or not, new research out of France suggests it is having a positive impact on the nutritional quality of products on-shelf.

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. chises buffet in citrus county floridaWebWe present a model in which some consumers shop on the basis of price alone, without paying attention to product quality. A firm may “cheat” and offer a worthless product to … graphite opusWebInattentive 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 a model in which some consumers shop on the basis of price alone, without paying attention to product quality. graphite on periodic tableWebSep 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. graphite or aluminium badminton racketWebMay 1, 2009 · The presence of inattentive consumers harms attentive consumers, and enables firms to earn positive profits. With many sellers, approximately half of them will … graphite operating temperatureWebJan 1, 2007 · In marketing research, information asymmetry suggests that consumers do not know exactly how the product is manufactured and what features it may possess (see … chisesbows.comWebMar 10, 2024 · Product quality refers to how well a product satisfies customer needs, serves its purpose and meets industry standards. When evaluating product quality, businesses consider several key factors, including whether a product solves a problem, works efficiently or suits customers' purposes. chi set in stone flat iron