Abstract

http://ssrn.com/abstract=2167364
 
 

References (4)



 
 

Footnotes (4)



 


 



Why Firms' Exploitation of Consumer Myopia May Benefit Myopic Consumers


Hans Zenger


Charles River Associates (CRA)

October 13, 2012

Economics Letters, Vol. 118, No. 2, pp. 307-309, 2013

Abstract:     
Myopic consumers underestimate the likelihood with which they will require follow-on services for products they purchase. Firms have an incentive to exploit this behavioral bias by skewing their price structure toward high add-on charges. Inadvertently, this skewed price structure provides myopic consumers with a monetary incentive mechanism that tends to inhibit, rather than propel, inefficient consumption decisions.

Number of Pages in PDF File: 8

Keywords: consumer myopia, pricing, add-ons

JEL Classification: D6, D8, L1

Accepted Paper Series





Download This Paper

Date posted: October 26, 2012 ; Last revised: December 12, 2012

Suggested Citation

Zenger, Hans, Why Firms' Exploitation of Consumer Myopia May Benefit Myopic Consumers (October 13, 2012). Economics Letters, Vol. 118, No. 2, pp. 307-309, 2013. Available at SSRN: http://ssrn.com/abstract=2167364

Contact Information

Hans Zenger (Contact Author)
Charles River Associates (CRA) ( email )
Avenue Louise 81
Brussels, 1050
Belgium
HOME PAGE: http://works.bepress.com/hans_zenger/
Feedback to SSRN


Paper statistics
Abstract Views: 239
Downloads: 49
References:  4
Footnotes:  4

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.328 seconds