Price Discrimination and Salience-Driven Consumer Preferences

Adrian, Nana C. (June 2018). Price Discrimination and Salience-Driven Consumer Preferences (Discussion Papers 19-06). Bern: Department of Economics

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This paper generalizes the price discrimination framework of Mussa and Rosen (1978) by considering salience-driven consumer preferences in the sense of Bordalo et al. (2013b). Consumers with salience-driven preferences give a higher weight to attributes that vary more. This reduces the monopolist’s propensity to treat different types of consumers differently. The paper’s main result characterizes the conditions under which the monopolist induces consumers to focus on price rather than on quality.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Adrian, Nana Christina

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

Discussion Papers

Publisher:

Department of Economics

Language:

English

Submitter:

Lars Tschannen

Date Deposited:

02 Sep 2020 14:44

Last Modified:

02 Sep 2020 14:44

JEL Classification:

D11, D42, D91, L11

BORIS DOI:

10.7892/boris.145892

URI:

https://boris.unibe.ch/id/eprint/145892

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