Consumer Choice, Imperfect Information, and Public Policy PDF Download

Author: Victor P. Goldberg
Publisher:
ISBN:
Category : Consumer education
Languages : en
Pages : 58

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Author: Howard Beales
Publisher:
ISBN:
Category : Consumer education
Languages : en
Pages : 34

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Author: Steven A. Greenlaw
Publisher:
ISBN: 9781947172432
Category : Business & Economics
Languages : en
Pages : 0

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Book Description
Principles of Macroeconomics for AP® Courses 2e covers the scope and sequence requirements for an Advanced Placement® macroeconomics course and is listed on the College Board's AP® example textbook list. The second edition includes many current examples and recent data from FRED (Federal Reserve Economic Data), which are presented in a politically equitable way. The outcome is a balanced approach to the theory and application of economics concepts. The second edition was developed with significant feedback from current users. In nearly all chapters, it follows the same basic structure of the first edition. General descriptions of the edits are provided in the preface, and a chapter-by-chapter transition guide is available for instructors.

Author: William J. Congdon
Publisher: Brookings Institution Press
ISBN: 0815704984
Category : Business & Economics
Languages : en
Pages : 260

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Book Description
Argues that public finance--the study of the government's role in economics--should incorporate principles from behavior economics and other branches of psychology.

Author: William L. Wilkie
Publisher:
ISBN:
Category : Consumer protection
Languages : en
Pages : 90

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Author: Ran Kivetz
Publisher:
ISBN:
Category : Consumers' preferences
Languages : en
Pages : 57

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Author: University of California, Davis. Institute of Governmental Affairs
Publisher:
ISBN:
Category : California
Languages : en
Pages : 58

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Author: Frank Hüttner
Publisher:
ISBN:
Category :
Languages : de
Pages :

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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.

Author: Frank Huettner
Publisher:
ISBN:
Category :
Languages : en
Pages : 52

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Book Description
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.

Author: Florian Baumann
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Book Description
This paper shows that the provision of consumer rights can decrease welfare when some consumers remain ignorant of these rights. We find that consumers uninformed about a mandated warranty demand excessively safe products in some circumstances. In other circumstances, uninformed consumers buy the efficient product variety like informed consumers but the former cross-subsidize the latter via firms' pricing. With respect to the salient policy option of improving information about consumer rights, we find that increasing the share of informed consumers may actually raise the risk of inefficiency.