Produkt
KlappentextI analyze the implication of consumers limited attention to quality differences on market outcomes and welfare. I model this limited attention to quality differences with a perception threshold: Consumers only perceive quality differences between goods that exceed the consumers perception threshold. The model allows for two types of equilibria: equilibria with distinguishable and equilibria with indistinguishable qualities. I show that horizontal product differentiation, which gives firms market power, affects equilibrium selection. If firms are horizontally differentiated, firms produce goods with indistinguishable qualities. Then, limited attention harms consumers and benefits firms. In contrast, if firms are not horizontally differentiated, firms produce goods with distinguishable qualities. Then, limited attention has no effect on consumers welfare or firms profits.
Details
ISBN/GTIN978-3-949224-05-8
ProduktartBuch
EinbandartKartoniert, Paperback
Erscheinungsjahr2022
Erscheinungsdatum07.09.2022
Seiten43 Seiten
SpracheEnglisch
Artikel-Nr.51073012
Rubriken
GenreWirtschaft