Inattentive consumers and product quality
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 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 …
Inattentive consumers and product quality
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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. 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 wit...
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. 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.
WebMar 1, 2009 · Inattentive consumers and product quality Authors: Mark Armstrong University of Oxford Yongmin Chen University of Colorado Boulder Request full-text … WebFeb 5, 2024 · Abstract We study a monopolistic firm’s various sales strategies to sell a new product to a rationally (in)attentive consumer who can conduct costly learning to resolve valuation uncertainty.
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WebJul 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 … theory lightweight cashmere cardigantheory linen-blend mini shirtdressWebMay 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 … shrubs in shadeWebCiteSeerX - 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 … theory linen button down dressWebFeb 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 ... theory linen oversized topWebA 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 … theory linen crunch open jacketWebInattentive 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. theory linen pants pants