An Investigation of Quick Thinking: Whether Consumers Are Willing to Pay More in Perfect Competition

Liu Chum Yee (), Sitong Jin, Qiaoyue Hu and Siqian Wen
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Liu Chum Yee: Yew Wah International Education School of Guangzhou
Sitong Jin: Wuxi United International School
Qiaoyue Hu: Guangzhou New Channel-Zengcheng Experimental Middle School
Siqian Wen: Wuhan Britain-China School

A chapter in Proceedings of the 3rd International Conference on Economic Development and Business Culture (ICEDBC 2023), 2024, pp 637-649 from Springer

Abstract: Abstract Some firms have earned an abnormal profit in the long run of perfect competition. However, massive papers have only examined the limitations of the perfect competition models from producer side because they have not considered the perspectives from the behavioral economics. The aim of this paper is to explain the abnormal profit in the relation of limitation of quick thinking and consumer willingness to pay Research design by the consumer side. The data were obtained from the owner design lab survey and field experiment to evaluate the heuristics of consumers. Our analysis showed a strong correlation between consumer choice and heuristic, especially under a low price product which requires more quick thinking. The main outcome of this paper is that Left-digit effect, Representation, Availability bias, anchoring bias are main heuristics during the quick thinking. However, the results depend on the quality and price of the products. In this case, the premise of the study is that the products being discovered has similar quality and price.

Keywords: quick decision; willingness to pay; perfect competition (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-246-0_77

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