Essays On Consumer Search Dynamic Competition And Regulation

Author : Alexei Parakhonyak
Publisher : Rozenberg Publishers
ISBN 13 : 9036101786
Total Pages : 139 pages
Book Rating : 4.83/5 ( download)

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Download or read book Essays on Consumer Search, Dynamic Competition and Regulation written by Alexei Parakhonyak and published by Rozenberg Publishers. This book was released on 2010 with total page 139 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Tong Lu
Publisher :
ISBN 13 :
Total Pages : 284 pages
Book Rating : 4.30/5 ( download)

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Download or read book Essays on Dynamic Updating of Consumer Preferences written by Tong Lu and published by . This book was released on 2018 with total page 284 pages. Available in PDF, EPUB and Kindle. Book excerpt: Consumers dynamically update their preferences over time based on information learned through product search and consumption experiences, particularly in online media. Using three unique datasets from different domains, we address specific ways in which firms can use rich information about their customers' behaviors to improve (1) the visual display of products on a webpage in online shopping, (2) predictions of new product adoption in online gaming, and (3) the timing of product release in online learning. First, we explore how consumers visually search through product options using eye-tracking data from two experiments conducted on the websites of two online clothing stores, which can inform retailers on how to position products on a virtual webpage. Second, we examine how consumers' variety-seeking preferences change depending on past consumption outcomes within the context of an online multi-player video game, which can be used to improve predictions of new product adoption. Third, we use clickstream data from an online education platform to test theories of goal progress, knowledge accumulation, and boundedly rational forward-looking behavior, which can be used to explain binge consumption patterns and inform content providers on the best way to structure and release content. In each of these three projects, we build a mathematical model of individual decisions, with the parameterization grounded in theories of consumer behavior, and we demonstrate through in-sample prediction that our model is able to capture specific heterogeneous patterns within the data. We then test that our model is able to make out-of-sample predictions related to managerial interventions, and empirically verify our predictions using either lab experiments or new field data following a natural experiment policy change.

Author : Bart Voogt
Publisher :
ISBN 13 : 9789036103022
Total Pages : 125 pages
Book Rating : 4.29/5 ( download)

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Download or read book Essays on Consumer Search and Dynamic Committees written by Bart Voogt and published by . This book was released on 2012 with total page 125 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Astrid Andrea Dick
Publisher :
ISBN 13 :
Total Pages : 173 pages
Book Rating : 4.96/5 ( download)

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Download or read book Essays on Market Structure, Competition and Consumer Behavior written by Astrid Andrea Dick and published by . This book was released on 2002 with total page 173 pages. Available in PDF, EPUB and Kindle. Book excerpt: (Cont.) Chapter 3, co-authored with Erik Brynjolfsson and Michael D. Smith, applies a flexible demand model to examine heterogeneous consumer behavior and estimate search benefits and costs across consumers types, based on a unique data set obtained from a major U.S.-based online shopbot. Consumer benefits to search are estimated using a compensating variations approach, by comparing the welfare generated by the first set of offers shown to the consumer in the default screen, and that generated by the entire set of offers. The benefits to searching lower screens are $1.65 for the median consumer, and the cost of carrying an exhaustive search of the offers is a maximum of $1.40 for the median consumer that chooses to search lower screens.

Author : Changxia Ke
Publisher :
ISBN 13 :
Total Pages : 220 pages
Book Rating : 4.99/5 ( download)

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Download or read book Three Essays on Consumer Search Behaviour in Experimental Market Environments written by Changxia Ke and published by . This book was released on 2010 with total page 220 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis investigates consumer search behavior in different contexts and its implications on certain market outcomes. It consists of three self-contained essays. Part one investigates if people search optimally and how price promotions (such as the provision of price discounts) influence search intensity and risk-taking behavior. We start with a typical sequential search task in a finite time horizon (with exogenously determined price dispersion) as the baseline treatment. In the two experimental treatments, exogenous discounts are introduced to the search process. The treatments differ in the amount of information on the discounts revealed to the subjects. Subjects' search behavior is roughly consistent with optimality for a risk-neutral agent, but significantly influenced by the introduction of discount vouchers. We find that subjects' search intensity is significantly reduced if they are in a shop that offers discounts, even when the monetary benefit induced by the discount has been taken into account. This suggests that people seem to gain extra non-monetary utility from buying a discounted product. Alternatively, subjects might overestimate the value of a discount. Following the findings in part one, we focus on price-framing effects of discounts on consumer search behavior in part two. In order to isolate the price-framing effect from all other possible influences, we adopt an extremely simple two-shop search model in which a consumer who sees the price for an item in a shop has to decide either to buy it or to incur a search cost to learn the ex-ante uncertain price in a second shop. The experiment is designed such that a rational buyer should make identical decisions in the base treatment (where prices are posted as net prices in both shops) and in the experimental treatments (where the price in one of the shops is framed as a gross price with a discount, holding the net-price constant). Using structural estimation of the observed risk preferences, we find that people tend to be more risk-averse and hence buy from the initial shop more often in the discount treatments, regardless of where the discount is offered. The seemingly trivial change to a discount-framing increases the complexity of the decision problem. Subjects reveal a tendency to stick with the comparatively less complex options more frequently as the complexity of the decision problem increases. However, this bias declines with experience, as subjects become more and more familiar with the framing. In part three, we study search behavior in a market experiment, where prices are determined endogenously by human players. More specifically, we examine the behavioral factors and the underlying mechanism which drive the widely observed asymmetric price adjustment to cost shocks (in a world with costly search behavior and information asymmetry). We show that price dispersion, as well as asymmetric price adjustment to cost shocks, arises in experimental markets, even though the standard theory predicts neither. We find that after controlling all the potential theoretical factors, the observed price dispersion can be explained by the presence of bounded rational play. Under price dispersion, asymmetric price adjustment arises naturally, as it is harder for buyers to learn that a negative cost shock has taken place. Learning is much quicker after a positive shock.

Author : Chen Lyu Ph.D.
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.24/5 ( download)

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Download or read book Essays in Information Economics written by Chen Lyu Ph.D. and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the first chapter, a recommendation platform sequentially collects information on a new product revealed from past consumer trials and uses it to better guide later consumers. Because consumers do not internalize the value of information they bring to others, their incentive for trying out the product can be socially insufficient. Given such a challenge, I study how the platform can maximize the total social surplus generated on it by designing its recommendation policy. In a model with binary product quality and general trial-generated signals, I show that the optimal design features a sequence of time-specific thresholds, which vary in a U-shaped pattern over the product's life. At any time, the platform should recommend the product if, based on its current belief, the probability of the product's quality being high is above the current threshold. My analysis also illustrates the potential usefulness of a Lagrangian duality approach for dynamic information design. The second chapter studies optimal information provision by a search goods seller. While the seller controls a consumer's pre-search information, he cannot control post-search information because the consumer will inevitably learn the product's match after search. A relaxed problem approach is developed to solve the optimal design, which accommodates both continuous value distributions and ex-ante heterogeneous consumers with privately known outside options. The optimal design is shown to crucially depend on the outside option value distribution, and can be implemented by a simple upper-censorship signal under certain regularity conditions. Several applications are provided, including comparing information designs of search goods and experience goods, and studying the effect of competition with a large number of sellers. The third chapter studies optimal disclosure regulation for entrepreneur public financing with a post-financing moral hazard problem. I show that partial disclosure can improve social welfare over full disclosure through reducing efficiency loss caused by the moral hazard problem. As a result, a properly designed partial disclosure rule would be optimal without assuming any disclosure cost. This remains true after allowing for endogenous entrepreneur types with adverse selection concerns. With (constrained) Bayesian persuasion tools, the optimal disclosure rule is fully characterized.

Author : Chen Lyu Ph.D.
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.18/5 ( download)

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Download or read book Essays in Information Economics written by Chen Lyu Ph.D. and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the first chapter, a recommendation platform sequentially collects information on a new product revealed from past consumer trials and uses it to better guide later consumers. Because consumers do not internalize the value of information they bring to others, their incentive for trying out the product can be socially insufficient. Given such a challenge, I study how the platform can maximize the total social surplus generated on it by designing its recommendation policy. In a model with binary product quality and general trial-generated signals, I show that the optimal design features a sequence of time-specific thresholds, which vary in a U-shaped pattern over the product's life. At any time, the platform should recommend the product if, based on its current belief, the probability of the product's quality being high is above the current threshold. My analysis also illustrates the potential usefulness of a Lagrangian duality approach for dynamic information design. The second chapter studies optimal information provision by a search goods seller. While the seller controls a consumer's pre-search information, he cannot control post-search information because the consumer will inevitably learn the product's match after search. A relaxed problem approach is developed to solve the optimal design, which accommodates both continuous value distributions and ex-ante heterogeneous consumers with privately known outside options. The optimal design is shown to crucially depend on the outside option value distribution, and can be implemented by a simple upper-censorship signal under certain regularity conditions. Several applications are provided, including comparing information designs of search goods and experience goods, and studying the effect of competition with a large number of sellers. The third chapter studies optimal disclosure regulation for entrepreneur public financing with a post-financing moral hazard problem. I show that partial disclosure can improve social welfare over full disclosure through reducing efficiency loss caused by the moral hazard problem. As a result, a properly designed partial disclosure rule would be optimal without assuming any disclosure cost. This remains true after allowing for endogenous entrepreneur types with adverse selection concerns. With (constrained) Bayesian persuasion tools, the optimal disclosure rule is fully characterized.

Author : Geunwook Paek
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.81/5 ( download)

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Download or read book Essays on Industrial Organization written by Geunwook Paek and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies a range of important policy questions regarding market competition and pricing regulation. In the first chapter, I analyze the effect of market competition on rate of innovation in the Dynamic Random Access Memory (DRAM) market. In this industry, the market has been consolidating over the last two decades. The number of DRAM producers decreased from over 20 in the early 1990s to around 5 now. Policy makers and antitrust agencies are concerned about effects of market consolidation on innovation and consumer price. Thus, it is an important policy question to understand how allowing further mergers in this industry would affect firms' incentive to innovate. To tackle this problem, I estimate a dynamic oligopoly model where firms optimally choose investment and production levels. The model incorporates two key features of the DRAM market. First, innovation becomes increasingly more difficult as process technology advances. Second, via learning-by-doing, production costs gradually decrease with production experience at each technology generation. I find that in the earlier periods of the study, there is a higher rate of innovation in a more competitive market (i.e., duopoly or triopoly) than in a monopoly. However, the relationship is reversed as innovation becomes more difficult. Consumer welfare is always higher in a more competitive market because total production is higher and price is lower. Additional counterfactuals examine how the two industry features affect the innovation-competition relationship. In Chapter 2, I analyze the welfare effects of allowing wholesale price discrimination in the US beer industry. The current US state law requires uniform pricing in the wholesale beer market. This means that a beer distributor has to set a single price for the same product across all the retailers it serves. But some large retailers often argue that they can negotiate better price if wholesale price discrimination is allowed. Costco actually filed a suit in Washington in 2004, but the court uphold the existing regulations. This industry background suggests that understanding the effects of allowing wholesale price discrimination is an important policy question. In theory, wholesale price discrimination can increase or decrease welfare. Welfare may increase if there are differences in price elasticity of demand across markets. In contrast, welfare may decrease if there are differences in downstream costs. Thus, how wholesale price discrimination affects welfare remains an empirical question. Using retail sales and wholesale price data from the Connecticut beer market, where wholesale price discrimination is prohibited, I estimate a structural model of demand and supply. With the estimated demand parameters and firms' costs, I simulate a counterfactual policy of allowing wholesale price discrimination in this market. I find that wholesale prices increase more in markets with lower price elasticities, and with lower downstream costs. Wholesalers are better off while consumers and retailers are worse off. The total welfare decreases about 1.14% when wholesale price discrimination is allowed.

Author : Xiaolong Liu
Publisher : Rozenberg Publishers
ISBN 13 : 9036101999
Total Pages : 132 pages
Book Rating : 4.98/5 ( download)

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Download or read book Three essays on real estate finance written by Xiaolong Liu and published by Rozenberg Publishers. This book was released on 2010 with total page 132 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Hui-Ting Wu
Publisher : Rozenberg Publishers
ISBN 13 : 9036101913
Total Pages : 196 pages
Book Rating : 4.12/5 ( download)

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Download or read book Essays on Top Management and Corporate Behavior written by Hui-Ting Wu and published by Rozenberg Publishers. This book was released on 2010 with total page 196 pages. Available in PDF, EPUB and Kindle. Book excerpt: