کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
4638338 | 1632000 | 2016 | 15 صفحه PDF | دانلود رایگان |
It has been recently suggested that both the number of options considered by consumers and their satisfaction when shopping respond to changes in the mean and spread of market prices. A structured analysis of those responses is provided in this paper. A new adverse effect related with consumer’s welfare is presented here, namely a consumer that searches exhaustively among all market options–called maximizer–experiences welfare loss when the dispersion of prices is too high. In fact, her welfare exhibits an inverted-UU shape with respect to the standard deviation σσ of prices so that an increase in price spread produces more welfare for small values of σσ but it has a negative effect for larger values of σσ. This new phenomenon is termed σσ-overload. It is also shown that a consumer that is content with shopping from a reduced sample of options–a satisficer–avoids σσ-overload by adapting her search behavior to the increase in spread. A quantitative assessment of consumer’s behavior and welfare with respect to changes in the mean and dispersion of prices under different scenarios is also provided.
Journal: Journal of Computational and Applied Mathematics - Volume 291, 1 January 2016, Pages 242–256