The paper presents an experiment testing the hypothesis that, if consumers’ valuation of a product is shaped by past experiences of prices, it may be more profitable for firms to follow the opposite strategy of pricing higher and then lower. We ran an individual choice experiment with a posted...

The paper presents an experiment testing the hypothesis that, if consumers do not have well defined preferences and as a result their valuation of a new product is shaped by past experiences of prices, it may be more profitable for firms to follow the opposite strategy of pricing high and then...

We describe a first experiment on whether product complexity affects competition and consumers in retail markets. We are unable to detect a systematic effect of product complexity on prices, except insofar as the demand elasticity for complex products is higher. However, there is qualified...

Economists traditionally model choice as the maximization of a stable utility function. A simple way of modeling envy (though not the only one) is by adding a term which is a negative function of the consumption of the other agent(s) in one's own utility function. This paper briefly reviews some...

The paper presents an experiment testing the hypothesis that, if consumers do not have well defined preferences and as a result their valuation of a new product is shaped by past experiences of prices, it may be more profitable for firms to follow a strategy of pricing high and then lower. We...