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Consumer Behavioural Biases in Competition: A Survey

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  • Steffen Huck
  • Jidong Zhou

Abstract

This is a survey of studies that examine competition in the presence of behaviourally biased or boundedly rational consumers. It will tackle questions such as: How does competition and pricing change when consumers are biased? Can inefficiencies that arise from consumer behavioural biases be mitigated by lowering barriers to entry? Do biased consumers make rational ones better or worse off? And will biased consumer behaviour be overcome through learning or education?
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Suggested Citation

  • Steffen Huck & Jidong Zhou, 2011. "Consumer Behavioural Biases in Competition: A Survey," Working Papers 11-16, New York University, Leonard N. Stern School of Business, Department of Economics.
  • Handle: RePEc:ste:nystbu:11-16
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    File URL: http://web-docs.stern.nyu.edu/old_web/economics/docs/workingpapers/2011/Zhou-BiasesCompetitionSurvery,%20May2011.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Gu, Yiquan & Wenzel, Tobias, 2015. "Consumer confusion, obfuscation, and price regulation," RIEI Working Papers 2015-04, Xi'an Jiaotong-Liverpool University, Research Institute for Economic Integration.
    2. Steffen Huck & Gabriele K. Lünser & Jean-Robert Tyran, 2016. "Price competition and reputation in markets for experience goods: an experimental study," RAND Journal of Economics, RAND Corporation, vol. 47(1), pages 99-117, February.
    3. Peter D.Lunn, 2012. "Behavioural Economics and Policy making,Learning from the Early Adopters," The Economic and Social Review, Economic and Social Studies, vol. 43(3), pages 423-449.
    4. D׳Agostino, Elena & Seidmann, Daniel J., 2016. "Protecting buyers from fine print," European Economic Review, Elsevier, vol. 89(C), pages 42-54.
    5. Alexander Morell & Andreas Glöckner & Emanuel Towfigh, 2009. "Sticky Rebates: Rollback Rebates Induce Non-Rational Loyalty in Consumers," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2009_23, Max Planck Institute for Research on Collective Goods, revised Feb 2013.
    6. repec:bla:scotjp:v:64:y:2017:i:2:p:169-190 is not listed on IDEAS
    7. Gu, Yiquan & Wenzel, Tobias, 2015. "Putting on a tight leash and levelling playing field: An experiment in strategic obfuscation and consumer protection," International Journal of Industrial Organization, Elsevier, vol. 42(C), pages 120-128.
    8. Chioveanu, Ioana, 2017. "Prominence, Complexity, and Pricing," MPRA Paper 81078, University Library of Munich, Germany.
    9. Yiquan Gu & Tobias Wenzel, 2014. "Strategic Obfuscation and Consumer Protection Policy," Journal of Industrial Economics, Wiley Blackwell, vol. 62(4), pages 632-660, December.
    10. repec:kap:jcopol:v:40:y:2017:i:2:d:10.1007_s10603-016-9338-4 is not listed on IDEAS
    11. Wenzel, Tobias, 2014. "Consumer myopia, competition and the incentives to unshroud add-on information," Journal of Economic Behavior & Organization, Elsevier, vol. 98(C), pages 89-96.
    12. Rasch, Alexander & Wenzel, Tobias, 2014. "The impact of piracy on prominent and non-prominent software developers," DICE Discussion Papers 167, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    13. Kenan Kalaycı, 2016. "Confusopoly: competition and obfuscation in markets," Experimental Economics, Springer;Economic Science Association, vol. 19(2), pages 299-316, June.

    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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