We introduce consumer loss aversion into the Salop (1979) model of price competition with differentiated products. Firms face uncertain costs of production, and after observing their own cost realizations simultaneously set prices. A consumer derives “gain-loss utility” from comparing the purchase price and her satisfaction with the acquired product to her recent expectations regarding the same...

INTRODUCTION ................................................................................ 360 I. RECENT HISTORY OF SMART GRID ................................... 363 II. CONSUMER-FACING COMPONENTS AND TWO KEY CHALLENGES ......................................................................... 365 A. Physical Components of Consumer-Facing Smart Grid .... 366 B. Demand side benefits enabled b...

David S. Johnson, Stephen B. Reed, and Kenneth J. Stewart The report by the U.S. Advisory Commission to Study the Consumer Price Index (known more commonly as the Boskin Report), issued on December 4, 1996, addressed the broad conceptual question of whether a cost-of-living index (COLI) should be the measurement objective of a price index and focused attention on three key problems inherent in ...

When consumers do not know the prices at which different firms sell, they often also do not know production costs. Consumer search models which take asymmetric information about production costs into account continue focusing on reservation price equilibria (RPE) and their properties. We argue that RPE assume specific out-ofequilibrium beliefs that are not consistent with the logic of the D1 re...

Businesses (retailers) often wish to offer personalized advertisements (coupons) to individuals (consumers), but run the risk of strong reactions from consumers who want a customized shopping experience but feel their privacy has been violated. Existing models for privacy such as differential privacy or information theory try to quantify privacy risk but do not capture the subjective experience...

The Article counters the presumption that increased environmental regulation necessarily decreases economic prosperity. It analyzes the European chemical regulatory structure and deduces that any costs imposed on the consumer are minimal, and more cost effective than watered-down American regulations covering the same subject matter with approximately the same cost imposed on the consumer-taxpa...

Switching between electronic and traditional markets, consumers nowadays impact profoundly on market makers. To successful conduct business, firms have to carefully making channel decisions to meet the needs of customers. The purpose of this article is to offer normative models for analyzing consumer channel selection behaviors between traditional and electronic markets. Referred to transaction...

Laboratory markets are conducted to evaluate the effects of consumer search costs on market performance. The primary research goal is to assess the behavioral relevance of Diamond’s (1971) paradoxical conclusion that the injection of a small consumer search cost alters the equilibrium price prediction from competitive to monopoly levels. Although monopoly prices are not consistently observed, w...

We propose a new topic model for tracking timevarying consumer purchase behavior, in which consumer interests and item trends change over time. The proposed model can adaptively track changes in interests and trends based on current purchase logs and previously estimated interests and trends. The online nature of the proposed method means we do not need to store past data for current inferences...