Heuristic thinking and limited attention in the car market
Nicola Lacetera, Devin Pope and Justin Sydnor study millions of wholesale used-car sales and find that buyers attend mainly to the leftmost digits of the odometer. Sale prices fall sharply as readings cross each ten-thousand-mile mark, with smaller drops at thousand-mile marks. The authors model the pattern as inattention, estimate it structurally, and report that it appears to be driven by final consumers rather than by dealers, so the shortcut matters even in a high-stakes market where the information is easy to see.
Nicola Lacetera, Devin Pope and Justin Sydnor study millions of wholesale used-car sales and find that buyers attend mainly to the leftmost digits of the odometer. Sale prices fall sharply as readings cross each ten-thousand-mile mark, with smaller drops at thousand-mile marks. The authors model the pattern as inattention, estimate it structurally, and report that it appears to be driven by final consumers rather than by dealers, so the shortcut matters even in a high-stakes market where the information is easy to see.
Written from the abstract as published with the paper in its Crossref record, read 2026-10-29.
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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 https://doi.org/10.1257/aer.102.5.2206