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Salience, Competition, and Decoy Goods

Title data

Herweg, Fabian ; Müller, Daniel ; Weinschenk, Philipp:
Salience, Competition, and Decoy Goods.
In: Economics Letters. Vol. 153 (April 2017) . - pp. 28-31.
ISSN 0165-1765
DOI: https://doi.org/10.1016/j.econlet.2016.12.026

Abstract in another language

We consider a brand manufacturer who can offer, next to its high-quality product, also a decoy good and faces competition by a competitive fringe that produces low quality. We show that the brand manufacturer optimally provides a decoy good to boost the demand for its main product if consumers’ purchasing decisions are distorted by salient thinking. The optimal decoy good is designed such that the superior quality of the brand manufacturer’s main product and the unattractive feature of the fringe product are salient.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: Competition; Decoy good; Salience
Subject classification: JEL classification: L13; L15; D03; D21
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics VIII: International Competition Economics > Chair Economics VIII: International Competition Economics - Univ.-Prof. Dr. Fabian Herweg
Faculties
Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics VIII: International Competition Economics
Result of work at the UBT: Yes
DDC Subjects: 300 Social sciences
300 Social sciences > 330 Economics
Date Deposited: 01 Dec 2017 08:47
Last Modified: 01 Dec 2017 08:47
URI: https://eref.uni-bayreuth.de/id/eprint/40779