Behavioral Consumers in Industrial Organization

Michael Grubb

No 879, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: This paper succinctly overviews three primary branches of the industrial organization literature with behavioral consumers. The literature is organized according to whether consumers: (1) have non-standard preferences, (2) are overconfident or otherwise biased such that they systematically misweight different dimensions of price and other product attributes, or (3) fail to choose the best price due to suboptimal search, confusion comparing prices, or excessive inertia. The importance of consumer heterogeneity and equilibrium effects are also highlighted along with recent empirical work.

Keywords: behavioral industrial organization; bounded rationality; loss aversion; present bias; overconfidence; search; obfuscation; switching; inertia (search for similar items in EconPapers)
JEL-codes: D41 D42 D43 D81 D82 D83 L11 L12 L13 L15 (search for similar items in EconPapers)
Date: 2015-05-12
New Economics Papers: this item is included in nep-cbe, nep-com, nep-ind and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (45)

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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:879

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