When firms' shrouding of charges, as in Gabaix and Laibson (2006), meets with consumers' salient thinking, as in Bordalo et al. (2013), this can have severe welfare implications. The ensuing excessive competition for headline prices tends to inefficiently bias consumers' choice towards...

We run a market experiment where firms can choose not only their price but also whether to present comparable offers. They are faced with artificial demand from consumers who make mistakes when assessing the net value of products on the market. If some offers are comparable however, some...

This paper investigates the price and service rate decisions in a customer-intensive service in an M/M/1 queue system under the influence of social interactions, where a higher value of the service is perceived if more customers purchase the service. The customer-intensive nature of the service...

This paper analyzes the competitive interplay of prices amongst retail channels: offline (brick-and-mortar) and online (such as retailers’ websites and online marketplaces). We find evidence of a close competitive relationship between the two channels, in which prices correspond tightly across...

The so called flat-rate bias is a well documented phenomenon caused by consumers’ desire to be insured against fluctuations in their billing amounts. This paper shows that expectation-based loss aversion provides a formal explanation for this bias. We solve for the optimal two-part tariff when...

We examine welfare effects of real-time pricing in electricity markets. Before stochastic energy demand is known, competitive retailers contract with final consumers who exogenously do not have real-time meters. After demand is realized, two electricity generators compete in a uniform price...

We explore how pricing dynamics in the European airline industry vary with the competitive environment. Our results highlight substantial variations in pricing dynamics that are consistent with a theory of intertemporal price discrimination. First, the rate at which prices increase towards the...

This paper analyses the effect of antidumping (AD) duties on the pricing behaviour of exporters targeted with these measures. Using product and firm-level data for South Korea, the study provides evidence of increased export unit values and firms' markups following the imposition of AD ad...

According to static models of industrial organization, a rise in competition decreases prices. In this paper, I test whether this conclusion can be reversed in the mobile telecommunications markets where dynamic efficiency effects might be significant. The empirical test relies on the change in...

The so called flat-rate bias is a well documented phenomenon caused by consumers; desire to be insured against fluctuations in their billing amounts. This paper shows that expectation-based loss aversion provides a formal explanation for this bias. We solve for the optimal two-part tariff when...