Economics at your fingertips  

Equilibrium with Consumer Adjustment to Choice

Matthew Nagler ()

No 10, Working Papers from City University of New York Graduate Center, Ph.D. Program in Economics

Abstract: I present a spatial model of differentiated product markets in which consumers with heterogeneous tastes rationally improve their attitude towards the product they choose. Adjustment raises prices if adjustment facility is greater for consumers who initially prefer a product more (e.g., preferences and corresponding adjustments exhibit the halo effect). It lowers prices if instead easier adjustment for consumers with weaker initial preferences causes attitudinal regression to the mean. The theory explains higher prices in markets to the poor and less educated and so motivates re-examination of previously proposed solutions to the poor performance of those markets.

Keywords: decision-making; imperfect competition; location models; endogenous tastes (search for similar items in EconPapers)
JEL-codes: D03 D11 L10 (search for similar items in EconPapers)
Pages: 44
Date: 2016-03-20
New Economics Papers: this item is included in nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) First version, March 2016 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to (A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.)

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:

Access Statistics for this paper

More papers in Working Papers from City University of New York Graduate Center, Ph.D. Program in Economics Contact information at EDIRC.
Bibliographic data for series maintained by David A. Jaeger ().

Page updated 2021-06-12
Handle: RePEc:cgc:wpaper:010