Selling to overconfident consumers
WebJul 31, 2014 · In this paper, we propose a decision model of this overconfidence in valuation and analyze a retailer's advance selling strategy in a two-period setting. The presence of overconfident consumers yields new insights in the retailer's selling strategy. We find that advance selling strategy is not always beneficial to the retailer. Webvance selling when the di erence of the regular consumers’ expected valuation and expected surplus when not buying in advance is no less than a certain threshold.
Selling to overconfident consumers
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WebSelling to Overconfident Consumers Author & abstract Download & other version 39 References 126 Citations Most related Related works & more Corrections Author Listed: Michael D. Grubb Registered: Michael D. Grubb Abstract Consumers may overestimate the precision of their demand forecasts.
WebConsumers may overestimate the precision of their demand forecasts. This overconfidence creates an incentive for both monopolists and competitive firms to offer tariffs with … WebHence, firms selling to overconfident consumers design contracts with an additional goal in mind: either to maximize the amount by which consumers overvalue contracts or to minimize the amount by which consumers undervalue contracts, depending on the situation. In other words, firms aim to bake a large pie, keep a large share for themselves ...
WebSelling to Overconfident Consumers. Michael Grubb () No 06-018, Discussion Papers from Stanford Institute for Economic Policy Research. Abstract: Consumers may overestimate … WebSelling to Overconfident Consumers Author & abstract Download & other version 39 References 125 Citations Most related Related works & more Corrections Author Listed: …
WebMay 7, 2013 · We hypothesize that one cause is that individuals are overconfident (in particular, overprecise) in their estimation of order variation. Previous work has shown theoretically that underestimating the variance of demand causes orders to deviate from optimal in predictable ways. We provide two experiments supporting this theoretical link.
WebSelling to Overconfident Consumers by Michael D. Grubb :: SSRN Add Paper to My Library Selling to Overconfident Consumers 50 Pages Posted: 17 May 2005 Last revised: 24 Sep … bucket side cutter factoryWebSelling to Overconfident Consumers by Michael D. Grubb. Published in volume 99, issue 5, pages 1770-1807 of American Economic Review, December 2009, Abstract: Consumers may overestimate the precision of their demand forecasts. This overconfidence creates … buckets ice creamWebCan inefficiencies that arise from consumer behavioural biases be mitigated by lowering barriers to entry? Do biased consumers make rational ones better or worse off? And will biased consumer behaviour be overcome through learning or education? ... Grubb, M. (2009): 'Selling to Overconfident Consumers,' American Economic Review, 99(5), 1770 … bucket similar wordsWebconsumers to systematically misweight different dimensions of product quality and price. Poor choices based on biased estimates of a product's expected costs or benefits are the … bucket simpletrashWebThis paper overviews three primary branches of the industrial organization literature with behavioral consumers. The literature is organized according to whether consumers: (1) … bucket side cutter manufacturershttp://www.columbia.edu/~md3405/BE_Risk_6_15.pdf bucket simpleWeb"Selling to Overconfident Consumers," American Economic Review, American Economic Association, vol. 99(5), pages 1770-1807, December. Michael D. Grubb, 2006. " Selling to Overconfident Consumers ," Discussion Papers 06-018, Stanford Institute for Economic Policy Research. buckets incredible craveables