Reference Dependence and Market Competition
نویسندگان
چکیده
منابع مشابه
Reference Dependence and Market Competition∗
This paper studies the implications of consumer reference dependence for market competition. If consumers take some product (e.g., the first product they consider) as the reference point when evaluating others and exhibit loss aversion, then the more “prominent” firm whose product is taken as the reference point by more consumers will randomize over a high and a low price. Relative to the stand...
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We incorporate reference-dependent worker behavior into a search-matching model of the labor market, in which firms have all the bargaining power and productivity follows a log-linear AR(1) process. Motivated by Akerlof (1982) and Bewley (1999), we assume that existing workers’ output falls stochastically from its normal level when their wage falls below a "reference point", which (following Kő...
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متن کاملNeural evidence for Reference-dependence in real-market-transactions.
Human decision making has become one of the major research-foci in economics, marketing and in neuroscience. This study integrates perspectives from these disciplines by examining neurophysiological correlates to Reference-dependence of utility evaluations in real market contexts both before and after choice. First, by comparing buying and selling decisions, we observe an activation of the amyg...
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Most economic models make use of extreme rationality hypotheses: firms maximize profits with full knowledge of their technology and prices, and, investors are subjective expected utility maximizers whose beliefs are correct. Surely, some firms and some investors do not always behave as these models hypothesize. But does this matter for predictions of market outcomes? It could be that the aggreg...
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ژورنال
عنوان ژورنال: Journal of Economics & Management Strategy
سال: 2011
ISSN: 1058-6407
DOI: 10.1111/j.1530-9134.2011.00309.x