Essay 2. A Model of Markets with Resale and Reference Dependent Consumers. This essay seeks to add to an emerging stream of literature that incorporates behavioral biases observed in experimental settings into formal economic models to understand their impact upon marketplace outcomes. One of the most robust empirical findings to emerge from experimental studies in psychology is that agents judge outcomes with respect to a reference point. We incorporate this notion of reference dependence into a formal model of markets with resale and examine how producer behavior and market outcomes change when agents care for reference utility. The introduction of reference dependence utility in our model lets us recover the qendowment effectq formally. Our analysis reveals that producer profit falls as consumers become more sensitive to reference utility. This result stands in contrast to most of the recent work in behavioral economics that suggests that producers gain from the biases of a boundedly rational consumer.... vehicle stock file to identify the details of the vehicle being traded-in. This can, in turn, be used to derive the economic value of a transaction that involves a trade-in. ... since 1926 and has become a standard in used-car pricing. The used- car prices provided in KBB are based upon thousands of transactions across the US and provide an overall assessment of the market (Kelly Blue Book Official guideanbsp;...
|Title||:||Two Essays on the Marketing of Durable Goods|
|Author||:||Raghunath Singh Rao|
|Publisher||:||ProQuest - 2007|