infonet-economy

When markets are incomplete, the competitive equilibria considered so far are not constrained Pareto–efficient, production efficiency breaks down and shareholders no longer agree on the objective function of the firm. We first show by way of an example that these inefficiencies can result from the double role of firms in incomplete markets: providing high market value and providing...

Pay what you want (PWYW) is a new participative pricing mechanism in which consumers have maximum control over the price they pay. Previous research has suggested that participative pricing increases consumers' intent to purchase. However, sellers using PWYW face the risk that consumers will exploit their control and pay nothing at all or a price below the seller's costs....

Merchandise managers have long dreamt of automated dynamic systems to help them make well-informed pricing decisions. However, such systems have proved as elusive as the Holy Grail - until now, that is. The story of an Austrian DIY retailer shows often undetected opportunities to use valuable information, hidden in retailers' data warehouses, on consumer reactions to previous...

Neuromodulators such as serotonin, oxytocin, and testosterone play an important role in social behavior. Studies examining the effects of these neuromodulators and others on social cognition and behavior, and their neural underpinnings, are becoming increasingly common. Here, we provide an overview of methodological considerations for those wishing to evaluate or conduct empirical...

In this chapter, we present a set of concepts and tools for defining and examining strategic choice that are drawn from behavioral economics and discuss how they can be applied to and tested with neuroscience techniques. The standard language for studying strategic choice in economics is game theory. Game theory provides concrete mathematical formulas for linking strategic actions to...