Consumer myopia, competition and the incentives to unshroud add-on information

Tobias Wenzel

doi:10.1016/j.jebo.2013.12.002

Consumer myopia, competition and the incentives to unshroud add-on information

Tobias Wenzel

Department of Economics

Research output: Contribution to journal › Article › peer-review

8 Citations (SciVal)

139 Downloads (Pure)

Abstract

This paper studies unshrouding decisions in a framework similar to Gabaix and Laibson (2006), but considers an alternative unshrouding mechanism where the impact of advertising add-on information depends on the number of unshrouding firms. We show that shrouding becomes less prevalent as the number of competing firms increases. With unshrouding costs a non-monotonic relationship between the number of firms and unshrouding may arise.

Original language	English
Pages (from-to)	89-96
Number of pages	8
Journal	Journal of Economic Behavior and Organization
Volume	98
DOIs	https://doi.org/10.1016/j.jebo.2013.12.002
Publication status	Published - 1 Feb 2014

Keywords

Add-on pricing
Bounded rationality
Shrouding

ASJC Scopus subject areas

Organizational Behavior and Human Resource Management
Economics and Econometrics

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10.1016/j.jebo.2013.12.002

gl_final
NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Economic Behavior and Organization. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Wenzel, T. (2014). Consumer myopia, competition and the incentives to unshroud add-on information. Journal of Economic Behavior and Organization, 98, 89-96. 10.1016/j.jebo.2013.12.002
Accepted author manuscript, 163 KB

Cite this

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Consumer myopia, competition and the incentives to unshroud add-on information

Abstract

Keywords

ASJC Scopus subject areas

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