IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Pricing Psychology: Evidence from a Randomized Field Experiment in a Consumer Credit Market

Listed author(s):
  • Marianne Bertrand
  • Dean Karlan

This paper tests stylized facts and theories from behavioral economics and laboratory experiments using a randomized field experiment of our design. A major South African consumer credit lender issued 60,000 scripted direct mail solicitations where several marketing “treatments†were randomly assigned. These treatments were designed to test the empirical sensitivity of decision frames that have proven powerful in the lab but remain largely untested in the market. Examples include loss v. gain, level v. difference, and more v. less information. The Lender also randomly assigned interest rate offers, enabling us to scale “behavioral†responses to marketing treatments by canonical price elasticities and thereby to “price psychology†. We will also test the extent to which our behavioral marketing exacerbated or ameliorated private information problems (if any) in this market. The mailing yielded over 6,000 new loans and preliminary evidence suggests that consumers responded strongly to both prices and frames.

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Paper provided by Econometric Society in its series Econometric Society 2004 North American Summer Meetings with number 619.

in new window

Date of creation: 11 Aug 2004
Handle: RePEc:ecm:nasm04:619
Contact details of provider: Phone: 1 212 998 3820
Fax: 1 212 995 4487
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ecm:nasm04:619. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.