The Economic of Politics and the Politics of Economics

Geoffrey Brennan

Working Papers from Tasmania - Department of Economics

Abstract: A retail market in which customers repeat purchase is considered. Customers are influenced not only by the price set by the firm, but by their level of disenchantment. Disenchantment measures the degree of customer disaffection in the customer-firm relationship. Changes in price lead to proportional changes in disenchantment. It is demonstrated that when customers possess loss aversion with respect to disenchantment levels, the firm's optimal response is characterised by price rigidity.

Keywords: ECONOMIC; POLICY (search for similar items in EconPapers)
JEL-codes: C70 C78 (search for similar items in EconPapers)
Date: 1996

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:fth:tasman:1996-1

Access Statistics for this paper

More papers in Working Papers from Tasmania - Department of Economics
Address: UNIVERSITY OF TASMANIA, DEPARTMENT OF ECONOMICS, HOBART TASMANIA 7001 AUSTRALIA.
Contact information at EDIRC.
Series data maintained by Thomas Krichel ().