Nicola Lacetera

Nicola Lacetera

Economist and first author of the 2012 American Economic Review paper on how used-car buyers respond to odometer readings.

Who they are

Nicola Lacetera is first author of the 2012 paper with Devin Pope and Justin Sydnor. The working-paper version, NBER Working Paper 17030 (May 2011), states that part of the research was carried out while Lacetera and Sydnor were in the Economics Department at Case Western Reserve University.

Key papers

Lacetera, N., Pope, D. G., & Sydnor, J. R. (2012). Heuristic thinking and limited attention in the car market. American Economic Review, 102(5), 2206-2236. doi:10.1257/aer.102.5.2206

The paper analyses more than 22 million wholesale used-car transactions.

Key ideas

The paper reports left-digit bias in how odometer values are processed. Sale prices drop discontinuously at 10,000-mile thresholds and by smaller amounts at 1,000-mile thresholds. The authors model the bias as inattention, estimate the inattention parameter, and report that the pattern appears to be driven by final customers rather than professional agents. See The Left-Digit Effect.

Sources

  1. Lacetera, N., Pope, D. G., & Sydnor, J. R. (2012). Heuristic thinking and limited attention in the car market. American Economic Review, 102(5), 2206-2236. doi:10.1257/aer.102.5.2206
  2. NBER Working Paper 17030, Lacetera, Pope and Sydnor, May 2011.