Selling to overconfident consumers

American Economic Review

Volumn 99, Issue 5, 2009, Pages 1770-1807

  Grubb, Michael D ^a  

^a MASSACHUSETTS INSTITUTE OF TECHNOLOGY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 74949122505     PISSN: 00028282     EISSN: None     Source Type: Journal    
DOI: 10.1257/aer.99.5.1770     Document Type: Article

References (43)

1. Alpert, Marc, and Howard Raiffa. 1982. "A Progress Report on the Training of Probability Assessors." In Judgment Under Uncertainty: Heuristics and Biases, ed. Daniel Kahneman, Paul Slovic, and Amos Tversky, 294-305. Cambridge: Cambridge University Press.
2. Bar-Gill, Oren. 2006. "Bundling and Consumer Misperception." The University of Chicago Law Review, 73(1): 33-61.
3. Baron, David P., and David Besanko. 1984. "Regulation and Information in a Continuing Relationship." Information Economics and Policy, 1(3): 267-302.
4. Barrett, Garry F., and Stephen G. Donald. 2003. "Consistent Tests for Stochastic Dominance." Econometrica, 71(1): 71-104.
5. Bolger, Fergus, and Dilek Önkal-Atay. 2004. "The Effects of Feedback on Judgmental Interval Predictions." International Journal of Forecasting, 20(1): 29-39.
6. Conlin, Michael, Ted O'Donoghue, and Timothy J. Vogelsang. 2007. "Projection Bias in Catalog Orders." American Economic Review, 97(4): 1217-1249
7. Courty, Pascal, and Hao Li. 2000. "Sequential Screening." Review of Economic Studies, 67(4): 697-717.
8. Davidson, Russell, and Jean-Yves Duclos. 2000. "Statistical Inference for Stochastic Dominance and for the Measurement of Poverty and Inequality." Econometrica, 68(6): 1435-1464
9. DellaVigna, Stefano, and Ulrike Malmendier. 2004. "Contract Design and Self-Control: Theory and Evidence." Quarterly Journal of Economics, 119(2): 353-402.
10. Eliaz, Kfir, and Ran Spiegler. 2006. "Contracting with Diversely Naive Agents." Review of Economic Studies, 73(3): 689-714.
11. Eliaz, Kfir, and Ran Spiegler. 2008. "Consumer Optimism and Price Discrimination." Theoretical Economics, 3(4): 459-497
12. Ellison, Glenn. 2005. "A Model of Add-on Pricing." Quarterly Journal of Economics, 120(2): 585-637.
13. Esteban, Susanna, and Eiichi Miyagawa. 2005. "Optimal Menu of Menus with Self-Control Preferences." http://www.najecon.org/naj/cache/ 784828000000000455.pdf.
14. Esteban, Susanna, Eiichi Miyagawa, and Matthew Shum. 2007. "Nonlinear Pricing with Self-Control Preferences." Journal of Economic Theory, 135(1): 306-338
15. Fudenberg, Drew, and Jean Tirole. 1991. Game Theory. Cambridge, MA: MIT Press.
16. Gabaix, Xavier, and David Laibson. 2006. "Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets." Quarterly Journal of Economics, 121(2): 505-540
17. Grubb, Michael D. 2008. "Selling to Overconfident Consumers." http://ssrn.com/abstract=721701.
18. Hadar, Josef, and William R. Russell. 1969. "Rules for Ordering Uncertain Prospects." American Economic Review, 59(1): 25-34.
19. Hanoch, Giora, and Haim Levy. 1969. "The Efficiency Analysis of Choices Involving Risk." Review of Economic Studies, 36(107): 335-346
20. Jensen, Sissel. 2006. "Implementation of Competitive Nonlinear Pricing: Tariffs with Inclusive Consumption." Review of Economic Design, 10(1): 9-29.
21. Kaur, Amarjot, B. L. S. Prakasa Rao, and Harshinder Singh. 1994. "Testing for Second-Order Stochastic Dominance of Two Distributions." Econometric Theory, 10(5): 849-866
22. Lambrecht, Anja, and Bernd Skiera. 2006. "Paying Too Much and Being Happy About It: Existence, Causes, and Consequences of Tariff-Choice Biases." Journal of Marketing Research, 43(2): 212-223
23. Lichtenstein, Sarah, Baruch Fischhoff, and Lawrence D. Phillips. 1982. "Calibration of Probabilities: The State of the Art to 1980." In Judgment Under Uncertainty: Heuristics and Biases, ed. Daniel Kahneman, Paul Slovic, and Amos Tversky, 306-334 Cambridge: Cambridge University Press.
24. Loewenstein, George, Ted O'Donoghue, and Matthew Rabin. 2003. "Projection Bias in Predicting Future Utility." Quarterly Journal of Economics, 118(4): 1209-1248
25. Maskin, Eric, and John Riley. 1984. "Monopoly with Incomplete Information." RAND Journal of Economics, 15(2): 171-196
26. Miravete, Eugenio J. 1996. "Screening Consumers through Alternative Pricing Mechanisms." Journal of Regulatory Economics, 9(2): 111-132
27. Miravete, Eugenio J. 2005. "The Welfare Performance of Sequential Pricing Mechanisms." International Economic Review, 46(4): 1321-1360
28. Mirrlees, James A. 1971. "An Exploration in the Theory of Optimum Income Taxation." Review of Economic Studies, 38(114): 175-208.
29. Mussa, Michael, and Sherwin Rosen. 1978. "Monopoly and Product Quality." Journal of Economic Theory, 18(2): 301-317
30. Oi, Walter Y. 1971. "A Disneyland Dilemma: Two-Part Tariffs for a Mickey Mouse Monopoly." Quarterly Journal of Economics, 85(1): 77-96.
31. Oster, Sharon M., and Fiona M. Scott Morton. 2005. "Behavioral Biases Meet the Market: The Case of Magazine Subscription Prices." BE Journal of Economic Analysis and Policy: Advances in Economic Analysis and Policy, 5(1): 1-30.
32. Plous, Scott. 1995. "A Comparison of Strategies for Reducing Interval Overconfidence in Group Judgments." Journal of Applied Psychology, 80(4): 443-454
33. Riordan, Michael H., and David E. M. Sappington. 1987. "Awarding Monopoly Franchises." American Economic Review, 77(3): 375-387
34. Rothschild, Michael, and Joseph E. Stiglitz. 1970. "Increasing Risk: I. A Definition." Journal of Economic Theory, 2(3): 225-243
35. Rothschild, Michael, and Joseph E. Stiglitz. 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information." Quarterly Journal of Economics, 90(4): 630-649
36. Sandroni, Alvaro, and Francesco Squintani. 2007. "Overconfidence, Insurance, and Paternalism." American Economic Review, 97(5): 1994-2004.
37. Seierstad, Atle, and Knut Sydsaeter. 1987. Optimal Control Theory with Economic Applications. Amsterdam: Elsevier Science, North-Holland.
38. Stole, Lars A. 1995. "Nonlinear Pricing and Oligopoly." Journal of Economics and Management Strategy, 4(4): 529-562
39. Stoline, Michael R., and Hans K. Ury. 1979. "Tables of the Studentized Maximum Modulus Distribution and an Application to Multiple Comparisons Among Means." Technometrics, 21(1): 87-93.
40. Train, Kenneth E. 1991. Optimal Regulation: The Economic Theory of Natural Monopoly. Cambridge, MA: MIT Press.
41. Tse, Yiu Kuen, and Xibin Zhang. 2004. "A Monte Carlo Investigation of Some Tests for Stochastic Dominance." Journal of Statistical Computation and Simulation, 74(5): 361-378
42. Uthemann, Andreas. 2005." "Competitive Screening of Customers with Non-Common Priors." http://www.ucl.ac.uk/-uctpaut/research/ uthemannfincp.pdf .
43. Wilson, Robert. 1993. Nonlinear Pricing. Oxford: Oxford University Press.