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 … WebFeb 5, 2024 · Abstract We study a monopolistic firm’s various sales strategies to sell a new product to a rationally (in)attentive consumer who can conduct costly learning to resolve valuation uncertainty.
Inattentive consumers and product quality
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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 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 ...
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 ... 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, …
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 ... 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 …
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 …
WebThe presence of inattentive consumers allows firms to earn positive profits, even thoughthereisonlyoneproductwhichhaspositivesocialvalue. Thefactthatfirms … diwali wishes for best friendWebThis 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 … crafts notesWebThis 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 ... crafts north walesWebMar 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. diwali wishes for brotherWebJul 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. crafts nowWebA 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 … craft snowWebThis 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. craft snowballs