Download or read book Consumer Choice Under Limited Attention when Options Have Different Information Costs written by Frank Hüttner and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Consumer Choice Under Limited Attention When Alternatives Have Different Information Costs written by Frank Huettner and published by . This book was released on 2018 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Consumer Choice Under Limited Attention when Alternatives Have Different Information Costs written by Frank Huettner and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Paradox of Choice written by Barry Schwartz and published by Harper Collins. This book was released on 2009-10-13 with total page 308 pages. Available in PDF, EPUB and Kindle. Book excerpt: Whether we're buying a pair of jeans, ordering a cup of coffee, selecting a long-distance carrier, applying to college, choosing a doctor, or setting up a 401(k), everyday decisions—both big and small—have become increasingly complex due to the overwhelming abundance of choice with which we are presented. As Americans, we assume that more choice means better options and greater satisfaction. But beware of excessive choice: choice overload can make you question the decisions you make before you even make them, it can set you up for unrealistically high expectations, and it can make you blame yourself for any and all failures. In the long run, this can lead to decision-making paralysis, anxiety, and perpetual stress. And, in a culture that tells us that there is no excuse for falling short of perfection when your options are limitless, too much choice can lead to clinical depression. In The Paradox of Choice, Barry Schwartz explains at what point choice—the hallmark of individual freedom and self-determination that we so cherish—becomes detrimental to our psychological and emotional well-being. In accessible, engaging, and anecdotal prose, Schwartz shows how the dramatic explosion in choice—from the mundane to the profound challenges of balancing career, family, and individual needs—has paradoxically become a problem instead of a solution. Schwartz also shows how our obsession with choice encourages us to seek that which makes us feel worse. By synthesizing current research in the social sciences, Schwartz makes the counter intuitive case that eliminating choices can greatly reduce the stress, anxiety, and busyness of our lives. He offers eleven practical steps on how to limit choices to a manageable number, have the discipline to focus on those that are important and ignore the rest, and ultimately derive greater satisfaction from the choices you have to make.
Download or read book Revenue Management and Pricing Analytics written by Guillermo Gallego and published by Springer. This book was released on 2019-08-14 with total page 336 pages. Available in PDF, EPUB and Kindle. Book excerpt: “There is no strategic investment that has a higher return than investing in good pricing, and the text by Gallego and Topaloghu provides the best technical treatment of pricing strategy and tactics available.” Preston McAfee, the J. Stanley Johnson Professor, California Institute of Technology and Chief Economist and Corp VP, Microsoft. “The book by Gallego and Topaloglu provides a fresh, up-to-date and in depth treatment of revenue management and pricing. It fills an important gap as it covers not only traditional revenue management topics also new and important topics such as revenue management under customer choice as well as pricing under competition and online learning. The book can be used for different audiences that range from advanced undergraduate students to masters and PhD students. It provides an in-depth treatment covering recent state of the art topics in an interesting and innovative way. I highly recommend it." Professor Georgia Perakis, the William F. Pounds Professor of Operations Research and Operations Management at the Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts. “This book is an important and timely addition to the pricing analytics literature by two authors who have made major contributions to the field. It covers traditional revenue management as well as assortment optimization and dynamic pricing. The comprehensive treatment of choice models in each application is particularly welcome. It is mathematically rigorous but accessible to students at the advanced undergraduate or graduate levels with a rich set of exercises at the end of each chapter. This book is highly recommended for Masters or PhD level courses on the topic and is a necessity for researchers with an interest in the field.” Robert L. Phillips, Director of Pricing Research at Amazon “At last, a serious and comprehensive treatment of modern revenue management and assortment optimization integrated with choice modeling. In this book, Gallego and Topaloglu provide the underlying model derivations together with a wide range of applications and examples; all of these facets will better equip students for handling real-world problems. For mathematically inclined researchers and practitioners, it will doubtless prove to be thought-provoking and an invaluable reference.” Richard Ratliff, Research Scientist at Sabre “This book, written by two of the leading researchers in the area, brings together in one place most of the recent research on revenue management and pricing analytics. New industries (ride sharing, cloud computing, restaurants) and new developments in the airline and hotel industries make this book very timely and relevant, and will serve as a critical reference for researchers.” Professor Kalyan Talluri, the Munjal Chair in Global Business and Operations, Imperial College, London, UK.
Download or read book Intermediate Microeconomics written by Patrick M. Emerson and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Consumer Choice Imperfect Information and Public Policy written by Victor P. Goldberg and published by . This book was released on 1973 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays on Consumer Choice with Unobserved Choice Sets written by Maura Coughlin and published by . This book was released on 2020 with total page 179 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays that evaluate how consumers make decisions in settings where the researcher may not know the set of alternatives from which observed choices were selected. Many empirical analyses in economics presume the researcher knows the full set of alternatives an individual compared when selecting their most preferred. In practice, this assumption may fail to hold for a variety of reasons. In the first chapter, I introduce the economic setting of unobserved choice sets and consideration sets defining to this work. In the second chapter, my coauthors and I propose a robust method of discrete choice analysis when agents' choice sets are unobserved. Our core model assumes nothing about agents' choice sets apart from their minimum size. Importantly, it leaves unrestricted the dependence, conditional on observables, between agents' choice sets and their preferences. We first establish that the model is partially identified and characterize its sharp identification region. We then apply our theoretical findings to learn about households' risk preferences and choice sets from data on their deductible choices in auto collision insurance. The third chapter evaluates the prescription drug insurance choices of Medicare beneficiaries. I propose an empirical model of demand for prescription drug plans where non-monetary plan attributes stochastically determine the composition of the set of plans that an individual considers, and monetary plan attributes determine the individual's expected utility over contracts in her consideration set. This model reconciles the classic view of insurance contracts as lotteries with purely monetary outcomes with the empirical finding that choice among insurance plans is driven by their non-monetary attributes and financial attributes beyond their impacts on costs. I estimate the model using data from Medicare Part D allowing for unobserved heterogeneity in risk aversion and in consideration sets. I find that the latter plays a crucial role in plan choices, and in contrast to previous literature that assumes full consideration of all plans, I uncover an important role for risk aversion in determining individual choices.
Download or read book Consumer Choices and Transparency in the Health Insurance Industry written by United States. Congress. Senate. Committee on Commerce, Science, and Transportation and published by . This book was released on 2010 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Foundations of Behavioral Economic Analysis written by Sanjit Dhami and published by Oxford University Press, USA. This book was released on 2020-01-02 with total page 354 pages. Available in PDF, EPUB and Kindle. Book excerpt: This fifth volume of The Foundations of Behavioral Economic Analysis covers behavioral models of learning. It is an essential guide for advanced undergraduate and postgraduate students seeking a concise and focused text on this important subject, and examines heuristics and biases in judgment and decision making, mental accounting, and behavioral finance and bounded rationality. This updated extract from Dhami's leading textbook allows the reader to pursue subsections of this vast and rapidly growing field and to tailor their reading to their specific interests in behavioral economics.
Download or read book Can Information about Energy Costs Affect Consumers Choices written by Annina Angelina Boogen and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: There is an ongoing debate in the literature about whether consumers are fully informed when investing in energy efficiency. We experimentally evaluate the role of imperfect information or limited attention about energy costs of home appliances and light bulbs on households' choices. Using in-home visits, we collect information on the energy efficiency of home appliances and light bulbs that households own. Exploiting these unique data, the intervention provided treated households with customized information about the potential of monetary savings from the adoption of new comparable efficient durables. We find a substantial impact of our information treatment on both the energy efficiency of the newly purchased durables and the intensity of utilization of existing home appliances. Our findings suggest that individuals are not fully informed about or pay attention to energy costs when purchasing and utilizing home appliances.
Download or read book Rejectable Choice Sets written by Jeffrey Parker and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: To date, research on no-choice options has primarily examined the conditions that foster choice deferral, thus focusing on the frequency with which consumers select the no-choice option. in this article, the authors argue that even if the no-choice option is not selected, its mere presence in the choice set may alter consumers' choices. more specifically, they investigate how decision processes and preferences change when consumers have a no-choice option versus when they are forced to choose from a given choice set. they propose that the inclusion of a no- choice option in a choice set affects preferences by leading consumers to determine not only which alternative is best, but which, if any, are acceptable (i.e., meet the consumer's minimum needs). accordingly, the authors demonstrate that the inclusion of a no-choice option in the choice set (1) leads to more alternative- (rather than attribute-) based information processing, (2) increases the importance of attributes that are more meaningful when alternatives are evaluated one by one (i.e., enriched attributes), and (3) increases the importance of attributes with levels that are closer to the consumer's minimum needs (thresholds). they demonstrate that such changes influence consumers' preference structures and ultimate choices. they conclude with a discussion of the theoretical, methodological, and managerial implications of these findings.
Download or read book Choosing Schools written by Mark Schneider and published by Princeton University Press. This book was released on 2021-02-09 with total page 329 pages. Available in PDF, EPUB and Kindle. Book excerpt: School choice seeks to create a competitive arena in which public schools will attain academic excellence, encourage individual student performance, and achieve social balance. In debating the feasibility of this market approach to improving school systems, analysts have focused primarily on schools as suppliers of education, but an important question remains: Will parents be able to function as "smart consumers" on behalf of their children? Here a highly respected team of social scientists provides extensive empirical evidence on how parents currently do make these choices. Drawn from four different types of school districts in New York City and suburban New Jersey, their findings not only stress the importance of parental decision-making and involvement to school performance but also clarify the issues of school choice in ways that bring much-needed balance to the ongoing debate. The authors analyze what parents value in education, how much they know about schools, how well they can match what they say they want in schools with what their children get, how satisfied they are with their children's schools, and how their involvement in the schools is affected by the opportunity to choose. They discover, most notably, that low-income parents value education as much as, if not more than, high-income parents, but do not have access to the same quality of school information. This problem comes under sensitive, thorough scrutiny as do a host of other important topics, from school performance to segregation to children at risk of being left behind.
Download or read book Handbook of Behavioral Economics Foundations and Applications 1 written by and published by Elsevier. This book was released on 2018-09-27 with total page 749 pages. Available in PDF, EPUB and Kindle. Book excerpt: Handbook of Behavioral Economics: Foundations and Applications presents the concepts and tools of behavioral economics. Its authors are all economists who share a belief that the objective of behavioral economics is to enrich, rather than to destroy or replace, standard economics. They provide authoritative perspectives on the value to economic inquiry of insights gained from psychology. Specific chapters in this first volume cover reference-dependent preferences, asset markets, household finance, corporate finance, public economics, industrial organization, and structural behavioural economics. This Handbook provides authoritative summaries by experts in respective subfields regarding where behavioral economics has been; what it has so far accomplished; and its promise for the future. This taking-stock is just what Behavioral Economics needs at this stage of its so-far successful career. - Helps academic and non-academic economists understand recent, rapid changes in theoretical and empirical advances within behavioral economics - Designed for economists already convinced of the benefits of behavioral economics and mainstream economists who feel threatened by new developments in behavioral economics - Written for those who wish to become quickly acquainted with behavioral economics
Download or read book Review of Marketing Research written by Naresh K. Malhotra and published by Emerald Group Publishing. This book was released on 2008-01-01 with total page 223 pages. Available in PDF, EPUB and Kindle. Book excerpt: Provides articles by the marketing field's leading researchers and academicians. This work includes chapters that are not only theoretically rigorous but also offer detail, including literature reviews, advanced methodologies, empirical studies, emerging trends, international developments, and guidelines for implementation.
Download or read book The Active Consumer written by Marina Bianchi and published by Routledge. This book was released on 2006-05-10 with total page 288 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Active Consumer discusses how consumers seem to delight in trying new solutions and exploring new combinatory possibilities. This book provides an economic-theoretical understanding of this phenomenon and the many ways in which innovation can structure consumer choice. The authors show from different points of view how central novelty can be in consumer behaviour, how it relates to technical change and how new consumer capabilities are developed and organized.
Download or read book Behavioural Insights and Public Policy Lessons from Around the World written by OECD and published by OECD Publishing. This book was released on 2017-03-01 with total page 408 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report discusses the use and reach of behavioural insights, drawing on a comprehensive collection of over 100 applications across the world and policy sectors.
