The Effects of Selling Complements and Substitutes on Consumer Willingness to Pay: Evidence from Laboratory Experiments
Matthew Rousu (),
Robert Beach () and
Jay Corrigan ()
Working Papers from Kenyon College, Department of Economics
Basic economic theory predicts that a consumer’s willingness to pay for a good is affected by the availability of complements and substitutes. In an auction setting, this theory implies that the presence of complements would increase bid prices for a good, while the presence of substitutes would decrease bid prices for a good. We designed an experiment that allows the calculation of inverse elasticities, the inverse-demand equivalent of conventional price elasticities. Our results show that the availability of complementary and substitute products affects bids in the expected directions. This finding has important implications for researchers who design experimental auctions.
Keywords: auctions; complements; consumer demand; demand flexibilities; inverse elasticities; laboratory experiments; substitutes. (search for similar items in EconPapers)
JEL-codes: C91 D44 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Journal Article: The Effects of Selling Complements and Substitutes on Consumer Willingness to Pay: Evidence from a Laboratory Experiment (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ken:wpaper:0801
Access Statistics for this paper
More papers in Working Papers from Kenyon College, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Jay Corrigan ().