Friday, June 26, 2009
Tuesday, June 23, 2009
Saturday, June 20, 2009
Thursday, June 18, 2009
Reason-Based Judgments: Using Reasons to Decouple Perceived Price-Quality Correlation
Received 23 October 2007;
Many models of consumer behaviour assume that people evaluate price and quality independently. However, evidence shows that consumers perceive price and quality as positively related even when they are weakly correlated in the real markets. This paper explores whether this perceived relationship can be cognitively de-coupled by providing explicit reasons why low price and high quality may be compatible. The participants were asked to rate existing stores and fictitious stores in a two-dimensional price-quality space. When the participants were given plausible reasons why the seemingly high quality fictitious stores could have lower than average prices, their judgement of the price-quality relationship was significantly less correlated than when these stores were judged without such reasons. Therefore, the demonstrated phenomenon of reason-based judgments can be used to attenuate the typical price-quality overestimation, or heuristic, which has important implications for decision making research and marketing practice.
Keywords: judgment; reasons; price-quality correlation; consumer behaviour; decision making
Wednesday, June 17, 2009
Monday, June 15, 2009
Consequently, should high inflation rates take hold many will be adversely affected. The Notable and Quotable section of the Wall Street Journal contained a description of the harms inflation inflicted on one particular person in the 1970's. Students identify better with stories of real people than abstract concepts, so relaying this little story may help them understand how inflation harms innocent people as they try to plan for the future.
Friday, June 12, 2009
- Why landownders benefit from farm subsidies when land is fixed
- Why consumers benefit from farm subsidies when land is not fixed
- Why the price of corn and sorghum move in tandem
- Why the prices of commodities between regions do not exceed transportation costs
- Why stock prices and commodity prices are efficient
- Why sunny days are not necessarily the best time to go to the zoo
- Why crop prices increase between harvests
- Why compensating people for building in areas where floods will predictably occur make everyone worse off.
- Why rent-seeking often eliminates any potential benefit from government subsidies.
- Why rent-seeking limits the ability of government to correct for market failures.
Thursday, June 11, 2009
Monday, June 8, 2009
Thursday, June 4, 2009
- Projecting Rates of Return
- Opportunity Costs, Livestock, and Colonial America...
- Reality of Politics
- Death To America
- The Rational Man
- Passive Values and Policy
- Incentives and Unintended Consequences
- Minimum Wages - Good For Some, Bad For Many
- Incentives and Economics
- Perils of Inflation
- The Indifference Principle
- Principles of Economics
- Good for the Group, Not for Society
- What Is An Economist?
- Stumbling Upon Adam Smith
- Benefits of Education
- Teaching Tips by Eric Devuyst
- ▼ June (17)