Abstract
Abstract
Commercial practices such as drip pricing, reference pricing and best-price guarantee can be used to set higher prices and mislead consumers, but protective measures can restore efficiency. In a placebo-controlled market experiment, we examined a treatment allowing for the use and misuse of commercial practices. Three additional treatments tested the effects of formal sanctions, informal sanctions and a regret nudge. We found that commercial practices led to higher prices, cheating was systematic and regret nudging was ineffective. Furthermore, formal and informal sanctions reduced both the likelihood of using commercial practices and the likelihood of cheating, leading to welfare increases.
Publisher
Cambridge University Press (CUP)
Subject
Political Science and International Relations,Sociology and Political Science,Social Sciences (miscellaneous),Social Psychology,Applied Psychology
Reference57 articles.
1. Putting on a tight leash and levelling playing field: An experiment in strategic obfuscation and consumer protection
2. The Court of Justice and the Unfair Commercial Practices Directive
3. Microeconomic systems as an experimental science;Smith;The American Economic Review,1982
4. The nature of salience: An experimental investigation of pure coordination games;Mehta;American Economic Review,1994
Cited by
1 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献