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Mattia Nardotto (KU Leuven) – "Price norms and consumption behavior"
CREST Microeconomics Seminar :
Time: 12:15 pm – 1:30pm
Date: 25th Sep. 2019
Place: Room 3001.
Mattia Nardotto (Science Po) – “Price norms and consumption behavior”
abstract: “In this this paper we examine the role of memory and attention in consumer behavior. We experimentally vary prices of 30 familiar consumption goods over 8 months across more than 500 stores of a large retailer. We find that individual price histories shape purchasing decisions by generating price norms that anchor choices. Consumers then under-react to small price changes relative to the norm, but over-react to large changes. Consistent with the role of recall of historical prices, we find that purchases are less price-sensitive when historical prices are more volatile. Our findings underscore the importance of attention and selective recall of past experiences in shaping decisions, and are relevant to understanding pricing decisions by firms.”
food provided, no registration needed