Consumer Theory in the Dark

Departement d'Economie et Sciences de la Décision

Intervenant : Colin Stewart ( U. Toronto)

Salle T-011 

A growing body of evidence suggests that consumers are not fully informed about prices, contrary to a critical assumption of classical consumer theory. We analyze a model in which consumer types can vary in both their preferences and their information about prices. Given data on demand and the distribution of prices, we identify the set of possible values of the consumer surplus. Each surplus in this set can be rationalized with simple information structures and preferences. We extend the analysis to richer datasets and provide bounds on counterfactual demands for perfectly observed prices.

Joint work with: Pavel Kocourek and Jakub Steiner.