Projects per year
Gaudeul and Sugden have hypothesized that, when some but not all competing products are priced in a common standard, consumers who are liable to make errors in cross-standard price comparisons use decision rules that discriminate in favour of common-standard offers. Such behavior incentivizes sellers to use common standards. We report an experimental test of this hypothesis, using choice tasks similar to those represented in the Gaudeul–Sugden model. We found that offers priced in common standards were more likely to inspected but less likely to be chosen, and that subjects gained little benefit from common pricing standards that applied to some but not all offers. Most subjects used ‘dominance editing’ operations which eliminated transparently dominated offers, either as an initial shortlisting device or while offers were being sorted. Because these operations discriminate against common-standard offers, their use incentivizes sellers not to use common standards.
|Number of pages||18|
|Early online date||24 Mar 2017|
|Publication status||Published - May 2018|
- common standard
- dominance editing
- consideration set
- School of Economics - Professor of Economics
- Centre for Behavioural and Experimental Social Science - Member
- Centre for Competition Policy - Member
- Behavioural Economics - Member
- Economic Theory - Member
Person: Research Group Member, Research Centre Member, Academic, Teaching & Research
- 2 Finished
Reconstructing normative economics on a foundation of mutual advantage
Sugden, R., Isoni, A. & Zheng, J.
1/01/16 → 30/06/21
Network for Intergrated Behavioural Science
Starmer, C., Turocy, T., Barr, A., Brown, G., Chater, N., Cubitt, R., Fatas, E., Gathergood, J., Gosling, S., Hargreaves-Heap, S., Lomes, G., MacKay, R., Poulsen, A., Read, D., Stewart, N., Sugden, R. & Zizzo, D.
Economic and Social Research Council
31/12/12 → 30/12/16