Consumer exploitation and notice periods

C-Tier
Journal: Economics Letters
Year: 2019
Volume: 174
Issue: C
Pages: 89-92

Authors (2)

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Firms often set long notice periods when consumers cancel a contract, and sometimes do so even when the costs of changing or canceling the contract are small. We investigate a model in which a firm offers a contract to consumers who may procrastinate canceling it due to naive present-bias. We show that the firm may set a long notice period to exploit naive consumers.

Technical Details

RePEc Handle
repec:eee:ecolet:v:174:y:2019:i:c:p:89-92
Journal Field
General
Author Count
2
Added to Database
2026-01-29