Why firms’ exploitation of consumer myopia may benefit myopic consumers

C-Tier
Journal: Economics Letters
Year: 2013
Volume: 118
Issue: 2
Pages: 307-309

Score contribution per author:

1.005 = (α=2.01 / 1 authors) × 0.5x C-tier

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

Abstract

Myopic consumers underestimate the likelihood with which they will require follow-on services for products they purchase. Firms have an incentive to exploit this behavioral bias by skewing their price structure toward high add-on charges. Inadvertently, this skewed price structure provides myopic consumers with a monetary incentive mechanism that tends to inhibit, rather than propel, inefficient consumption decisions.

Technical Details

RePEc Handle
repec:eee:ecolet:v:118:y:2013:i:2:p:307-309
Journal Field
General
Author Count
1
Added to Database
2026-01-29