Selling in Advance to Loss Averse Consumers

Karle, Heiko; Möller, Marc (2020). Selling in Advance to Loss Averse Consumers. International economic review, 61(1), pp. 441-468. Wiley 10.1111/iere.12429

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This paper examines the influence of information on market performance in an advance purchase setting. Information reduces the risk that an advance purchase results in a mismatch between consumer preferences and product characteristics. However, information may also raise the number of advance purchases by increasing firms' incentive to offer advance purchase discounts. Accounting for consumers' aversion towards losses/risks turns out to be crucial as it changes our assessment of policies aiming to improve consumers' information: Under monopoly information can be detrimental both for efficiency and consumer surplus whereas under competition information is doubly beneficial because it mitigates inter‐temporal business stealing.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Microeconomics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Economic Theory

UniBE Contributor:

Möller, Marc

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

1468-2354

Publisher:

Wiley

Language:

English

Submitter:

Dino Collalti

Date Deposited:

31 Jan 2020 16:06

Last Modified:

13 Feb 2020 01:33

Publisher DOI:

10.1111/iere.12429

BORIS DOI:

10.7892/boris.138522

URI:

https://boris.unibe.ch/id/eprint/138522

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