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...

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 savvy...

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...

We consider a model of firm pricing and consumer choice, where consumers are loss averse and uncertain about their future demand. Possibly, consumers in our model prefer a flat rate to a measured tariff, even though this choice does not minimize their expected billing amount - a behavior in line...

Priceline.com patents the innovative marketing strategy, Name-Your-Own-Price (NYOP), that sells opaque products through customer-driven pricing. In this paper, we study how competitive suppliers with sub- stitutable, non-replenishable goods may sell their products (1) as regular goods through a...

We analyze a model of price competition ά la Bertrand in a network environment. Firms only have a limited information on the structure of network: they know the number of potential customers they can attract and the degree distribution of customers. This incomplete information framework...

The policy debate surrounding predatory lending laws and the subprime mortgage market opposes two hypotheses. The first is that an efficient market is providing broader access to credit, offering mortgages with higher rates and fees to higher risk borrowers, and that prices relate directly to...

A methodology is proposed to estimate structural models of product line competition. This methodology enables researchers to estimate demand systems accounting for the endogeneity of the mix of products available in each market, an issue which is typically ignored in the empirical literature. In...