Jidong Zhou
Economist who modelled what happens when firms compete on how prices are presented as well as on the prices themselves.
Who they are
Zhou works at Yale on industrial organisation and consumer search. The 2013 paper with Ioana Chioveanu treats price frames as a strategic variable rather than a presentational detail.
Key papers
Chioveanu, I., & Zhou, J. (2013). Price competition with consumer confusion. Management Science, 59(11), 2450-2469.
Key ideas
Frame choices affect the comparability of price offers and may cause consumer confusion and lower price sensitivity.
In equilibrium, firms randomise their frame choices to obfuscate price comparisons and sustain positive profits.
An increase in the number of competitors can induce firms to rely more on frame complexity, which may boost industry profits and lower consumer surplus.
Concepts on this site
Sources
- doi:10.1287/mnsc.2013.1716