2024 Inattentive consumers and product quality

Inattentive consumers and product quality

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August undefined, 2024

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 a model in which some consumers shop on the basis of price alone, without paying attention to product quality. 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. - ORA - Oxford …

WebCiteSeerX - 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 … WebThe presence of inattentive consumers allows ﬁrms to earn positive proﬁts, even thoughthereisonlyoneproductwhichhaspositivesocialvalue. Thefactthatﬁrms … glwach facebook

(Open Access) Inattentive Consumers and Product Quality (2007)

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 ... WebDec 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. WebJan 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 … glwach er phone number

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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. 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 … bolhofner loud houseWebThis 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 inattentive consumers. In the unique symmetric equilibrium, firms follow a mixed strategy involving both price and quality dispersion. glwach contact

"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 … " - Inattentive consumers and product quality

Inattentive consumers and product quality

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 … 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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WebInattentive Consumers and Product Quality∗ - Economics. EN. English Deutsch Français Español Português Italiano Român Nederlands Latina Dansk Svenska Norsk Magyar … 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 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. 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 …

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 … 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 · 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 …

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 ... glwach dining facility lunch menuWebIn 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 … bolhoff ss25b140WebMay 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. bolholt christmas partyWebA 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. glwach dfac menuWebMay 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 … bolhofeWebA 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 … bolholt apartmentsWebThe spillover amounts to an average drop of $2,057 in consumer valuations of these manufacturers’ vehicles and a 34.6% reduction in their annual sales. We substantiate our interpretation that the estimates reflect a reputation spillover using data on internet search behavior and direct measures of consumer sentiment from Twitter. bol hollywood