The Law of Demand and the Loss of Confidence Effect: An Experimental Study

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F47813059%3A19520%2F19%3AA0000057" target="_blank" >RIV/47813059:19520/19:A0000057 - isvavai.cz</a>

Výsledek na webu

<a href="https://www.sciencedirect.com/science/article/pii/S2405844019363455" target="_blank" >https://www.sciencedirect.com/science/article/pii/S2405844019363455</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1016/j.heliyon.2019.e02685" target="_blank" >10.1016/j.heliyon.2019.e02685</a>

Jazyk výsledku

angličtina

Název v původním jazyce

The Law of Demand and the Loss of Confidence Effect: An Experimental Study

Popis výsledku v původním jazyce

The aim of this article is to examine the possibility that a market demand function (curve) might not be monotonically decreasing in its entire domain according to the consumer theory neoclassical as assumed by the law of demand (for normal goods). This may happen due to limited rationality of (some) consumers and the anchor price effect. When a price of a good decreases to some point, the amount demanded might stops increasing due to the loss of confidence effect: consumers’ unwillingness to buy a too cheap product. The existence of this effect was examined via questionnaire on a sample of 377 undergraduate university students from the Czech Republic, Ecuador and Spain. The main result of this experimental study is that the loss of confidence effect appeared at all three locations, which indicates that the law of demand may not be valid in its entire domain. Furthermore, the results of this study imply that a significant percentage of people make decisions of limited rationality even when facing a very simple task. In addition, statistically significant difference in rational behavior with respect to gender was found.

Název v anglickém jazyce

The Law of Demand and the Loss of Confidence Effect: An Experimental Study

Popis výsledku anglicky

The aim of this article is to examine the possibility that a market demand function (curve) might not be monotonically decreasing in its entire domain according to the consumer theory neoclassical as assumed by the law of demand (for normal goods). This may happen due to limited rationality of (some) consumers and the anchor price effect. When a price of a good decreases to some point, the amount demanded might stops increasing due to the loss of confidence effect: consumers’ unwillingness to buy a too cheap product. The existence of this effect was examined via questionnaire on a sample of 377 undergraduate university students from the Czech Republic, Ecuador and Spain. The main result of this experimental study is that the loss of confidence effect appeared at all three locations, which indicates that the law of demand may not be valid in its entire domain. Furthermore, the results of this study imply that a significant percentage of people make decisions of limited rationality even when facing a very simple task. In addition, statistically significant difference in rational behavior with respect to gender was found.

Druh

J_SC - Článek v periodiku v databázi SCOPUS

CEP obor

—

OECD FORD obor

50201 - Economic Theory

Projekt

—

Návaznosti

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Rok uplatnění

2019

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Heliyon

ISSN

2405-8440

e-ISSN

—

Svazek periodika

5

Číslo periodika v rámci svazku

11

Stát vydavatele periodika

NL - Nizozemsko

Počet stran výsledku

6

Strana od-do

1-6

Kód UT WoS článku

—

EID výsledku v databázi Scopus

2-s2.0-85074132994