Behavioral Consumers in Industrial Organization: An Overview

This paper overviews three primary branches of the industrial organization literature with behavioral consumers. The literature is organized according to whether consumers: (1) have non-standard preferences; (2) are overconfident or otherwise biased such that they systematically misweight different...

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Bibliographic Details
Published inReview of industrial organization Vol. 47; no. 3; pp. 247 - 258
Main Author Grubb, Michael D.
Format Journal Article
LanguageEnglish
Published New York Springer 01.11.2015
Springer US
Springer Nature B.V
Subjects
Bias
Consumer attitudes
Consumer behavior
Consumers
Consumption
Decision making
Economics
Economics and Finance
Equilibrium
Industrial Organization
Inertia
Microeconomics
Preferences
Prices
Product differentiation
Self control
Studies
D41
D43
D42
Present bias
Obfuscation
Exploitative contracting
L12
Behavioral industrial organization
L11
Switching
Bounded rationality
Loss aversion
Overconfidence
L13
L15
Search
Inertia
D81
D83
D82
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Summary:This paper overviews three primary branches of the industrial organization literature with behavioral consumers. The literature is organized according to whether consumers: (1) have non-standard preferences; (2) are overconfident or otherwise biased such that they systematically misweight different dimensions of price and other product attributes; or (3) fail to choose the best price due to suboptimal search, confusion comparing prices, or excessive inertia. The importance of consumer heterogeneity and equilibrium effects are also highlighted along with recent empirical work.
ISSN:0889-938X
1573-7160
DOI:10.1007/s11151-015-9477-9