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This book synthesizes recent developments in the theory of Industrial Organization, incorporating aspects of consumer psychology that are absent from the standard model of rational choice. The book analyzes three classes of market models in which profit-maximizing firms interact with boundedly rational consumers, each capturing a different aspect of bounded consumer rationality: dynamically inconsistent preferences and biased beliefs regarding future preferences, limited ability to understand price complexity, and reference-dependent choice. These models address questions such as: Can we expla ... More
Keywords: bounded rationality, industrial organization, behavioral economics, behavioral industrial organization, price complexity, dynamically inconsistent preferences, biased beliefs, reference-dependent choice, consumer psychology, consumer protection, regulation, monopoly, competition
Print publication date: 2011 | Print ISBN-13: 9780195398717 |
Published to Oxford Scholarship Online: September 2011 | DOI:10.1093/acprof:oso/9780195398717.001.0001 |
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