Work

Firm prominence and price framing

Year: 2026

Type: article

Abstract: This paper explores the strategic use of price framing in a duopoly where firms differ in their prominence and where both frame differentiation and frame complexity are sources of consumer confusion. It analyzes the interaction between the relative effectiveness of the two sources of consumer confusion and firms’ prominence levels, and its impact on equilibrium outcomes. A parametric condition on firms’ prominence delineates different equilibrium outcomes and synthesizes the interaction between firm prominence and consumer confusion. In equilibrium, firms do not always coordinate on the most effective source of confusion. The impact of consumer protection policy on market outcomes, especially consumer surplus, depends crucially on underlying market conditions, and can be ineffective or even detrimental to consumers.

Source: Journal of Economic Behavior & Organization

DOI: 10.1016/j.jebo.2026.107458

Authors: Ioana Chioveanu, Yiquan Gu, Tobias Wenzel

Institutions: University of Nottingham, University of Reading, Heinrich Heine University Düsseldorf

Language: English

Topic: Consumer Market Behavior and Pricing

Subfield: Marketing

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,180

Funder: British Academy