- A-Z
- Jena Economics Rese...
- Volume 8
- Choosing whether to...
- Autor(in)
- Erschienen
- 4. November 2014
- Nummer des Discussion-Papers
-
2014-026
- Schlagwort(e)
-
asymmetric dominance
attraction effect
collusion
competition
confusopoly
experiment
framing
industrial organization
obfuscation
oligopoly
price comparison
shrouding
spurious complexity
standardization
transparency
- Zusammenfsg.
-
We run a market experiment where firms can choose not only their price but also whether to present comparable offers. They are faced with artificial demand from consumers who make mistakes when assessing the net value of products on the market. If some offers are comparable however, some consumers favor the best of the comparable offers vs. non-comparable offers. We vary the number of such consumers as well as the strength of their preferences for the best of the comparable offers. In treatments where firms observe the past decisions of their competitors, firms learn not to present comparable offers especially when many consumers prefer comparable offers. This occurs after initial periods with strong competition and leads to lower welfare for all consumers. In treatments where firms cannot monitor the competition, firms end up having to present comparable offers, which leads to an improvement in welfare for all consumers.
- article pub. typess JER
- Research article
- article languages JER
- Englisch
- JEL-Classification for JER
- C92 - Laboratory, Group Behavior ; D18 - Consumer Protection ; D43 - Oligopoly and Other Forms of Market Imperfection ; L13 - Oligopoly and Other Imperfect Markets ; L15 - Information and Product Quality; Standardization and Compatibility
- URN
- urn:nbn:de:urmel-39c47e94-d28c-45d7-a89a-88b815766dac3-00238987-15