Abstract
I present a simple framework for modeling two-firm market competition when consumer choice is "frame-dependent," and firms use costless "marketing messages" to influence the consumers frame. This framework embeds several recent models in the "behavioral industrial organization" literature. I identify a property that consumer choice may satisfy, which extends the concept of Weighted Regularity due to Piccione and Spiegler (2012), and provide a characterization of Nash equilibria under this property. I use this result to analyze the equilibrium interplay between competition and framing in a variety of applications.
Original language | English |
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Pages (from-to) | 35-58 |
Number of pages | 24 |
Journal | American Economic Journal: Microeconomics |
Volume | 6 |
Issue number | 3 |
DOIs | |
State | Published - 2014 |