Inattentive consumers and product quality

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August undefined, 2024

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 … 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.

Selling New Product to Rationally (In)attentive Consumer

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 … 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 … dark chocolate chunk oatmeal cookies

(PDF) Endogenous Product Design and Quality When Consumers …

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 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 ... WebInattentive Consumers and Product Quality. Mark Armstrong and Yongmin Chen () MPRA Paper from University Library of Munich, Germany. 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 ... dark chocolate chunks

Simple Market Equilibria with Rationally Inattentive Consumers

Understanding Product Quality: What It Is and Why It Matters

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 inattentive consumers. In the unique symmetric equilibrium, firms follow a mixed strategy involving both price and quality dispersion. 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 … dark chocolate christmas barkWebDownloadable! 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. In the unique symmetric equilibrium of the model, firms choose prices with mixed strategies, similarly to Varian … dark chocolate chips no sugar added

"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. " - Inattentive consumers and product quality

Inattentive consumers and product quality

Simple Ingredients are Attracting Consumers to Natural Products

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

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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 … 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.

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 … WebSocial is the preferred product discovery platform for consumers age 18-44. 80% of social media marketers believe consumers will buy products directly in social apps more often than on brands ...

WebWe 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 … 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...

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

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 … bisection in ansysWebMar 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. bisection glycanWebInattentive 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 … bisection cppWebA 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 … dark chocolate cinnamon pecan kind barWebNov 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 … dark chocolate chunky barWebMar 10, 2024 · Product quality refers to how well a product satisfies customer needs, serves its purpose and meets industry standards. When evaluating product quality, … dark chocolate chunky candy barsWebDec 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. dark chocolate chunks trader joes