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Demand in the dark
- 1.0560011 - NHU-C 2023 RIV GB eng V - Research Report
Steiner, Jakub - Stewart, C. - Kocourek, P.
Demand in the dark.
London: Centre for Economic Policy Research, 2022. 31 s. CEPR discussion paper series, 17165. ISSN 0265-8003
Institutional support: Cooperatio-COOP
Keywords : revealed preference * information design * consumer surplus
OECD category: Economic Theory
https://cepr.org/publications/dp17165
A growing body of evidence suggests that consumers are not fully informed about prices, contrary to a critical assumption of classical consumer theory. We analyze a model in which consumer types can vary in both their preferences and their information about prices. Given data on demand and the distribution of prices, we identify the set of possible values of the consumer surplus. Each surplus in this set can be rationalized with simple information structures and preferences. We also show how to narrow down the set of values using richer datasets and provide bounds on counterfactual demands at perfectly observed prices.
Permanent Link: https://hdl.handle.net/11104/0333123
Number of the records: 1