Manipulating perception: The effect of product similarity on valuations and markets

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Standard

Manipulating perception: The effect of product similarity on valuations and markets. / Gotfredsen, Andreas; Nielsen, Carsten Søren; Sebald, Alexander Christopher; Webb, Edward John Dorrell.

I: Journal of Economic Behavior & Organization, Bind 190, 10.2021, s. 263-286.

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt

Harvard

Gotfredsen, A, Nielsen, CS, Sebald, AC & Webb, EJD 2021, 'Manipulating perception: The effect of product similarity on valuations and markets', Journal of Economic Behavior & Organization, bind 190, s. 263-286. https://doi.org/10.1016/j.jebo.2021.07.007

APA

Gotfredsen, A., Nielsen, C. S., Sebald, A. C., & Webb, E. J. D. (2021). Manipulating perception: The effect of product similarity on valuations and markets. Journal of Economic Behavior & Organization, 190, 263-286. https://doi.org/10.1016/j.jebo.2021.07.007

Vancouver

Gotfredsen A, Nielsen CS, Sebald AC, Webb EJD. Manipulating perception: The effect of product similarity on valuations and markets. Journal of Economic Behavior & Organization. 2021 okt.;190:263-286. https://doi.org/10.1016/j.jebo.2021.07.007

Author

Gotfredsen, Andreas ; Nielsen, Carsten Søren ; Sebald, Alexander Christopher ; Webb, Edward John Dorrell. / Manipulating perception: The effect of product similarity on valuations and markets. I: Journal of Economic Behavior & Organization. 2021 ; Bind 190. s. 263-286.

Bibtex

@article{b3c9b15206884ab6bcb21a26275740f5,
title = "Manipulating perception: The effect of product similarity on valuations and markets",
abstract = "We study the economic impact of perceptual limitations using experimental goods for which the difficulty of perceiving the difference between them can be manipulated by altering the similarity of their visual representation. In our first experiment, we found that subjects{\textquoteright} willingness-to-pay for goods became more similar when it was harder to discriminate between them. Building on this result, we ran a second experiment where the same experimental goods were traded in a market with heterogeneous buyer preferences and seller market power. Buyers were less likely to choose the option which maximises consumer surplus when discriminating between products was harder, and buyer payoffs were lower. We find indications that buyers used a different method of constructing their valuations in the market than in individual choice, and there was weak evidence that using different methods were beneficial for buyers. Seller prices and profits were not dependent on how easy it was for buyers to discriminate between goods.",
keywords = "Faculty of Social Sciences, perception, similarity, bounded rationality, willingness-to-pay, posted offer market, Experimental economics",
author = "Andreas Gotfredsen and Nielsen, {Carsten S{\o}ren} and Sebald, {Alexander Christopher} and Webb, {Edward John Dorrell}",
year = "2021",
month = oct,
doi = "10.1016/j.jebo.2021.07.007",
language = "English",
volume = "190",
pages = "263--286",
journal = "Journal of Economic Behavior & Organization",
issn = "0167-2681",
publisher = "Elsevier",

}

RIS

TY - JOUR

T1 - Manipulating perception: The effect of product similarity on valuations and markets

AU - Gotfredsen, Andreas

AU - Nielsen, Carsten Søren

AU - Sebald, Alexander Christopher

AU - Webb, Edward John Dorrell

PY - 2021/10

Y1 - 2021/10

N2 - We study the economic impact of perceptual limitations using experimental goods for which the difficulty of perceiving the difference between them can be manipulated by altering the similarity of their visual representation. In our first experiment, we found that subjects’ willingness-to-pay for goods became more similar when it was harder to discriminate between them. Building on this result, we ran a second experiment where the same experimental goods were traded in a market with heterogeneous buyer preferences and seller market power. Buyers were less likely to choose the option which maximises consumer surplus when discriminating between products was harder, and buyer payoffs were lower. We find indications that buyers used a different method of constructing their valuations in the market than in individual choice, and there was weak evidence that using different methods were beneficial for buyers. Seller prices and profits were not dependent on how easy it was for buyers to discriminate between goods.

AB - We study the economic impact of perceptual limitations using experimental goods for which the difficulty of perceiving the difference between them can be manipulated by altering the similarity of their visual representation. In our first experiment, we found that subjects’ willingness-to-pay for goods became more similar when it was harder to discriminate between them. Building on this result, we ran a second experiment where the same experimental goods were traded in a market with heterogeneous buyer preferences and seller market power. Buyers were less likely to choose the option which maximises consumer surplus when discriminating between products was harder, and buyer payoffs were lower. We find indications that buyers used a different method of constructing their valuations in the market than in individual choice, and there was weak evidence that using different methods were beneficial for buyers. Seller prices and profits were not dependent on how easy it was for buyers to discriminate between goods.

KW - Faculty of Social Sciences

KW - perception

KW - similarity

KW - bounded rationality

KW - willingness-to-pay

KW - posted offer market

KW - Experimental economics

U2 - 10.1016/j.jebo.2021.07.007

DO - 10.1016/j.jebo.2021.07.007

M3 - Journal article

VL - 190

SP - 263

EP - 286

JO - Journal of Economic Behavior & Organization

JF - Journal of Economic Behavior & Organization

SN - 0167-2681

ER -

ID: 281599786