Signalling product quality: when is price relevant?

Article Abstract:

The role of price as a signal of product quality is explored. It is found that when price acts as a signal of quality, the estimate is less elastic because it is reflecting two contradicting effects. However, the demand function becomes more price elastic if price stops being used as a signal. This could provide clarification regarding the results of Abbe-Decarroux research which show that high-price theater seats were price inelastic and low-priced seats were price elastic.

Product quality, Consumer behavior

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Expectations driven distortions in the foreign exchange market

Article Abstract:

The phenomenon of lasting deviations of the exchange rate from its fundamental value in the foreign exchange market is explained. A chartists-fundamentalists model is developed, where rational agents determine their speculative investment positions by choosing between technical and fundamental trading rules.

United States, Science & research, Evaluation, Economics, Industrial efficiency, Economic efficiency, Learning, Foreign exchange market, Economic theory

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Buyer experimentation and introductory pricing

Article Abstract:

A new study investigates the pricing choices of a monopolist seller in a dual-period model in which the seller and buyers are initially unsure about quality.

Management, Monopolies

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