Price competition and reputation in markets for experience goods: An experimental study

Autor(en)

Steffen Huck, Gabriele Lünser, Jean-Robert Tyran

Abstrakt

We experimentally examine the effects of price competition in markets for experience goods where sellers can build up reputations for quality. We compare price competition to monopolistic markets and markets where prices are exogenously fixed. Although oligopolies benefit consumers regardless of whether prices are fixed or endogenously chosen, we find that price competition lowers efficiency as consumers pay too little attention to reputation for quality. This provides empirical support to recent models in behavioral industrial organization that assume that consumers may, with increasing complexity of the marketplace, focus on selected dimensions of products.

Organisation(en)

Institut für Volkswirtschaftslehre, Wiener Zentrum für Experimentelle Wirtschaftsforschung

Externe Organisation(en)

Wissenschaftszentrum Berlin für Sozialforschung gGmbH, University College London, Center for Economic Learning and Social Evolution (ELSE)

Journal

RAND Journal of Economics

Band

47

Seiten

99-117

Anzahl der Seiten

19

ISSN

0741-6261

DOI

https://doi.org/10.1111/1756-2171.12120

Publikationsdatum

01-2016

Peer-reviewed

Ja

ÖFOS 2012

502045 Verhaltensökonomie, 502013 Industrieökonomik, 502021 Mikroökonomie

Schlagwörter

ASJC Scopus Sachgebiete

Economics and Econometrics

Link zum Portal

https://ucrisportal.univie.ac.at/de/publications/716235b8-2c81-4f69-852a-b6bf7b3ebd7c