This paper develops a novel approach to modeling preferences in monopolistic competition models with a continuum of goods. In contrast to the commonly used CES preferences, which do not capture the e¤ects of consumer income and the intensity of competition on equilibrium prices, the present preferences can capture both e¤ects. The relationship between consumers’ incomes and product prices is th...

For many services, consumers can choose among a range of optional tariffs that differ in their access and usage prices. Recent studies indicate that tariff-specific preferences may lead consumers to choose a tariff that does not minimize their expected billing rate. This study analyzes how tariff-specific preferences influence the responsiveness of consumers’ usage and tariff choice to changes ...

P returns cost U.S. companies more than $100 billion annually. The cost and scale of returns management issues necessitate a deeper understanding of how to deal with product returns. We develop an analytical model that describes how consumer purchase and return decisions are affected by a seller’s pricing and restocking fee policy. Taking into account the consumers’ strategic behavior, we deriv...

Consumer informedness plays a critical role in determining consumer choice in the presence of information technology (IT) deployed by competing firms in the marketplace. Using data collected through a series of stated choice experiments in two different research contexts, we examine how consumer characteristics and observed behaviors moderate the influence of price and product informedness on c...

Abstract This paper proposes a seminal model that combines heuristics and preferences to analyse decision-making processes related the consumption of goods services. The has been built by recombining different results from economic psychology in particular research programme called ecological rationality or environment-consistent rationality. With regard their algorithms, addition well-known le...