Price signaling with salient-thinking consumers

• 成果类型: Article
• 署名作者: Carroni, Elias; Mantovani, Andrea; Minniti, Antonio
• 署名单位: University of Bologna
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2022.12.010
• 发表日期: 2023
• 页码: 238-253
• 关键词: Salient thinking; Price signaling; Separating equilibria; Experience goods

摘要

This paper examines the signaling role of prices in a context of salient thinking. Consumers cannot observe product quality directly, and they focus on the product attribute - either quality or price - that stands out in the market. Our analysis shows that salience considerations mitigate the incentive to signal quality via price. Moreover, depending on the difference in quality between products, the separating price of the high-quality seller can be inflated or deflated in relation to a set-up of rational consumers. Our findings indicate that certain ways of setting prices for experience goods can be explained by combining price signaling with salient thinking.