| 来源类型 | Discussion paper
|
| 规范类型 | 论文
|
| 来源ID | DP17156
|
| DP17156 Price Saliency and Fairness: Evidence from Regulatory Shaming |
| Or Avishay-Rizi
|
| 发表日期 | 2022-03-31
|
| 出版年 | 2022
|
| 语种 | 英语
|
| 摘要 | What are the effects of attention to the price paid by other consumers on consumer demand and firms' pricing decisions? We study the effects of a regulation that required Israeli retailers to display on-the-shelf signs indicating the (cheap) international price of a product alongside the price of that product in the local store. We find that prices of products included in the regulation fell on average by 8%. The price drop was larger for products that were initially more expensive compared to their international price. Following the price drop, quantities sold increased. Yet, these increases were significantly smaller than increases in quantities that we predict based on pre-regulation demand elasticities and the actual price drops. Products that remained relatively expensive vis-a-vis their international price exhibited larger differences between predicted and actual quantities sold. We develop a theoretical model that explains these findings, and estimate it to quantify the importance of salient unfair prices. We find that a 20 percentage-point salient difference between local and international prices is equivalent to a 1% increase in the price of the local product itself. Next, we use the model and its estimated parameters to calculate the impact of the regulation on consumer utility. We find that utility declined for some products included in the regulation. This happens when the disutility from observing that other consumers pay less exceeds the added utility from reduced prices and increased consumption. We discuss potential implications of our findings for optimal pricing strategies, price rigidity, and theoretical models of salient thinking. |
| 主题 | Industrial Organization
; Organizational Economics
|
| 关键词 | Saliency
Fairness
Attention
Uniform pricing
Retail
|
| URL | https://cepr.org/publications/dp17156-0
|
| 来源智库 | Centre for Economic Policy Research (United Kingdom)
|
| 资源类型 | 智库出版物
|
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/546155
|
推荐引用方式
GB/T 7714 |
Or Avishay-Rizi. DP17156 Price Saliency and Fairness: Evidence from Regulatory Shaming. 2022.
|
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