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oai:docta.ucm.es:20.500.14352/236322023-08-26T17:51:34Zcom_20.500.14352_14col_20.500.14352_15

Consumer’s response to price distribution and σ-overload under time allocation Álvarez, Francisco Rey Simo, José Manuel Sanchis, Raúl G. Consumer behavior Time allocation Choice overload Price distribution. Opinión pública (Sociología) Microeconomía 6114.15 Opinión Publica 5307.15 Teoría Microeconómica It has been recently suggested that both the number of options considered by consumers and their satisfaction when shopping respond to changes in the mean and spread of market prices. A structured analysis of those responses is provided in this paper. A new adverse effect related with consumer’s welfare is presented here, namely a consumer that searches exhaustively among all market options – called maximizer – experiences welfare loss when the dispersion of prices is too high. In fact, her welfare exhibits an inverted-U shape with respect to the standard deviation σ of prices so that an increase in price spread produces more welfare for small values of σ but it has a negative effect for larger values of σ. This new phenomenon is termed σ-overload. It is also shown that a consumer that is content with shopping from a reduced sample of options – a satisficer – avoids σ-overload by adapting her search behavior to the increase in spread. A quantitative assessment of consumer’s behavior and welfare with respect to changes in the mean and dispersion of prices under different scenarios is also provided. Ministerio de Ciencia e Innovación (MICINN) Depto. de Análisis Económico y Economía Cuantitativa Fac. de Ciencias Económicas y Empresariales TRUE pub 2023-06-18T05:56:32Z 2023-06-18T05:56:32Z 2016 journal article https://hdl.handle.net/20.500.14352/23632 0377-0427 eng AGL2011-25175 restricted access application/pdf Elsevier