Related papers: Emergence of product differentiation from consumer…
We develop a probabilistic consumer choice framework based on information asymmetry between consumers and firms. This framework makes it possible to study market competition of several firms by both quality and price of their products. We…
Consumers in many markets are uncertain about firms' qualities and costs, so buy based on both the price and the quality inferred from it. Optimal pricing depends on consumer heterogeneity only when firms with higher quality have higher…
Market share and quality, or customer satisfaction, go together. Yet inferring one from the other appears difficult. Indeed, such an inference would need detailed information about customer behavior, and might be clouded by modes of…
There are clear benefits associated with a particular consumer choice for many current markets. For example, as we consider here, some products might carry environmental or `green' benefits. Some consumers might value these benefits while…
We consider a model of oligopolistic competition in a market with search frictions, in which competing firms with products of unknown quality advertise how much information a consumer's visit will glean. In the unique symmetric equilibrium…
We develop a location analysis spatial model of firms' competition in multi-characteristics space, where consumers' opinions about the firms' products are distributed on multilayered networks. Firms do not compete on price but only on…
We model competition on a credence goods market governed by an imperfect label, signaling high quality, as a rank-order tournament between firms. In this market interaction, asymmetric firms jointly and competitively control the aggregate…
In market modeling, one often treats buyers as a homogeneous group. In this paper we consider buyers with heterogeneous preferences and products available in many variants. Such a framework allows us to successfully model various market…
Prediction polling is an increasingly popular form of crowdsourcing in which multiple participants estimate the probability or magnitude of some future event. These estimates are then aggregated into a single forecast. Historically,…
Choice consistency with utility maximization, as a key assumption in economics, has been extensively used to evaluate decision quality of individuals and to predict real-world outcomes across different contexts. Here we investigate the…
In many markets buyers are poorly informed about which firms sell the product (product availability) and prices, and therefore have to spend time to obtain this information. In contrast, sellers typically have a better idea about which…
This paper studies ranking policies in a stylized trial-offer marketplace model, in which a single firm offers products and has consumers with heterogeneous preferences. Consumer trials are influenced by past purchases and the ranking of…
This paper proposes a method for estimating consumer preferences among discrete choices, where the consumer chooses at most one product in a category, but selects from multiple categories in parallel. The consumer's utility is additive in…
The state of economic theory and accumulated facts from the different branches of the economic science require to analyze the concept of the description of economy systems. The economic reality generates the problems the solution of that is…
This article develops a quality notion that is complementary to the system notion. As a major consequence, it becomes clear why quality can be measured only to a certain extend based on the issues of validity and incompleteness. First,…
The combination of argumentation and probability paves the way to new accounts of qualitative and quantitative uncertainty, thereby offering new theoretical and applicative opportunities. Due to a variety of interests, probabilistic…
Data regulations increasingly enable consumers to switch among market segments, making segmentation an endogenous outcome of strategic interaction. We study a model in which consumers choose segments before a monopolist sets…
We study how market segmentation affects consumers when a monopolist can adjust both prices and product qualities across segments, engaging in second- and third-degree price discrimination simultaneously. We characterize the…
We develop SHOPPER, a sequential probabilistic model of shopping data. SHOPPER uses interpretable components to model the forces that drive how a customer chooses products; in particular, we designed SHOPPER to capture how items interact…
We investigate the relationship between product offerings, information dissemination, and consumer decision-making in a monopolistic screening environment in which consumers lack information about their valuation of quality-differentiated…