Economics at your fingertips  

Salience, Competition, and Decoy Goods

Fabian Herweg (), Daniel Müller and Philipp Weinschenk

No 6168, CESifo Working Paper Series from CESifo Group Munich

Abstract: We consider a brand manufacturer who can offer, next to its high-quality product, also a decoy good and faces competition by a competitive fringe that produces low quality. We show that the brand manufacturer optimally provides a decoy good to boost the demand for its main product if consumers’ purchasing decisions are distorted by salient thinking. The optimal decoy good is designed such that the superior quality of the brand manufacturers’ main product and the unattractive feature of the fringe product are salient.

Keywords: competition; decoy good; salience (search for similar items in EconPapers)
JEL-codes: L13 L15 D03 D21 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
Journal Article: Salience, competition, and decoy goods (2017) Downloads
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:

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Group Munich Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().

Page updated 2019-04-19
Handle: RePEc:ces:ceswps:_6168