...Plus Shipping and Handling: Revenue (Non) Equivalence in Field Experiments on eBay

Hossain, Tanjim; Morgan, John

doi:10.2202/1538-0637.1429

Cited by 229 publications

(205 citation statements)

References 22 publications

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“…Researchers have found, for example, that consumers underrespond to nonsaliently displayed shipping costs (Hossain and Morgan 2006), that individual investors are net buyers of attention-grabbing stocks (Barber and Odean 2008), and that sufferers from natural disasters who have the additional misfortune of competing for attention with events like the Olympic games receive smaller donations (Eisensee and Strömberg 2007).…”

Section: Introductionmentioning

confidence: 99%

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When Rational Sellers Face Non-Rational Buyers: Evidence from Herding on eBay

Simonsohn

Ariely

2007

SSRN Journal

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P eople often observe others' decisions before deciding themselves. Using eBay data for DVD auctions we explore the consequences of neglecting nonsalient information when making such inferences. We show that bidders herd into auctions with more existing bids, even if these are a signal of no-longer-available lower starting prices rather than of higher quality. Bidders bidding a given dollar amount are less likely to win low starting price auctions, and pay more for them when they do win. Experienced bidders are less likely to bid on low starting price auctions. Remarkably, the seller side of the market is in equilibrium, because expected revenues are nearly identical for high and low starting prices.

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Section: Introductionmentioning

confidence: 99%

“…Previous research has shown that auctions with lower starting prices receive more bids (see, e.g., Bajari and Hortacsu 2003, Häubl and Popkowski Leszczyc 2003, Hossain and Morgan 2006. These studies, however, have not distinguished between bids for amounts above and below the higher starting prices.…”

mentioning

confidence: 95%

When Rational Sellers Face Non-Rational Buyers: Evidence from Herding on eBay

Simonsohn

Ariely

2007

SSRN Journal

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“…Gabaix and Laibson (2006) analyze pricing with boundedly rational consumers who do not pay attention to hidden features of product prices, which they refer to as"add-on"costs. This finding is supported by recent empirical evidence that people are inattentive to ancillary product costs such as sales taxes (Chetty et al, 2009), shipping and handling charges (Hossain and Morgan, 2006), or out-of-pocket insurance costs (Abaluck and Gruber, 2011).…”

Section: Limited Attention and Perception Biasesmentioning

confidence: 52%

Energy-Using Durables â€“ Why Consumers Refrain from Economically Optimal Choices

Schubert

Stadelmann

2015

Front. Energy Res.

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Sustainable development requires increasing the energy efficiency, decreasing the growth rates of energy demand, and decreasing the CO 2 emissions. In many countries, households' energy consumption is responsible for a considerable share of total energy demand and CO 2 emissions. Energy-using durables are essential in this context. Aiming at sustainability, private households should buy more energy-efficient durables and use them in a more efficient way. In principle, it might even be economically optimal to buy the more energy-efficient products, since they result in lower total costs over their lifetimethus resulting in a positive net present value (NPV). However, when observing private households' purchase decisions, they often do not correspond to the economic optimum, resulting in an "energy-efficiency gap." This paper investigates into the reasons for the persistence of such a gap between energy-efficient products that would be economically optimal -but from which consumers refrain -and less energy-efficient products that consumers actually own or buy although they entail larger life-cycle costs. Factors, which seem to deter private households from purchasing energy-efficient products with positive NPVs, are, for example, insufficient information, limited attention, or inertia. We will show how these and other factors hinder private households from identifying and realizing their economically optimal choices and how such barriers can be overcome. We will present how properly designed energy labels could help to overcome the information-related causes of inefficiently low energy-efficiency investments and provide some additional policy recommendations that could help reaching the aforementioned goal of a reduction of households' energy demand and CO 2 emissions in an adequate way.

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“…Empirical work that is relevant for our purposes includes Hossain and Morgan (2007); Ellison and Ellison (2009) ;Célérier and Vallée (2013); McDonald and Wren (2013); Muir et al (2013);Wenzel (2013). Those papers find evidence consistent with firms artificially increasing search costs, making comparisons across products difficult, concealing the full price of their products or making them so complex that an evaluation of their benefit is difficult.…”

Section: Introductionmentioning

confidence: 99%

Choosing Whether to Compete: Price and Format Competition with Consumer Confusion

Crosetto

Gaudeul

2014

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe run a market experiment where firms can choose not only their price but also whether to present comparable offers. They are faced with artificial demand from consumers who make mistakes when assessing the net value of products on the market. If some offers are comparable however, some consumers favor the best of the comparable offers vs. non-comparable offers. We vary the number of such consumers as well as the strength of their preferences for the best of the comparable offers. In treatments where firms observe the past decisions of their competitors, firms learn not to present comparable offers especially when many consumers prefer comparable offers. This occurs after initial periods with strong competition and leads to lower welfare for all consumers. In treatments where firms cannot monitor the competition, firms end up having to present comparable offers, which leads to an improvement in welfare for all consumers.

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...Plus Shipping and Handling: Revenue (Non) Equivalence in Field Experiments on eBay

Cited by 229 publications

References 22 publications

When Rational Sellers Face Non-Rational Buyers: Evidence from Herding on eBay

When Rational Sellers Face Non-Rational Buyers: Evidence from Herding on eBay

Energy-Using Durables â€“ Why Consumers Refrain from Economically Optimal Choices

Choosing Whether to Compete: Price and Format Competition with Consumer Confusion

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