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Confidence seems to replace certain knowledge and the necessity for specific information. It simplifies economical processes and procedures, it motivates investing, and obviously, it enhances welfare — if it was missing, innumerable dealings would not be made. Consequently, if confidence among...
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Cognitive dissonance may arise from the inconsistency between an individual's behavior and her self-image. We … specifically whether individuals avoid cognitive dissonance by (a) a change in behavior to comply with own attitudes and by (b) two … of conventional online shopping. Results indicate that individuals adapt their behavior after having received the …
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Group buying enables collective bargaining opportunity that individual buyers lack to negotiate prices with sellers. This potential negotiation capability has two opposing effects. On the one hand, the prospect of the group being able to negotiate price with its rival forces each seller to lower...
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We revisit the classical result that taxation of private consumption is distortionary and therefore precludes the efficient provision of public goods. We introduce a nonlinear consumption tax which we call a `tax lottery'. Under this scheme, an ad-valorem consumption tax is supplemented with a...
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The purpose of this note is to introduce how to evaluate strategic choices of the firm using economic principles. The procedure is based on simple cost benefit considerations such as building on the economic principles of incentive compatibility constraints based in Game Theory
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When physically similar products, of similar quality, are offered by retailers both online and offline, we often observe that the dispersion in prices of these products online is greater than the price dispersion offline. This observation runs counter to early theories that suggested price...
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In many industries, firms reward their customers for making referrals. We analyze the optimal policy mix of price, advertising intensity, and referral fee for a monopoly when buyers choose to what extent to refer other consumers to the firm. We find that the firm uses its referral fee, but not...
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