Sunday, August 5, 2012

Crooked Corporations and Forgetful Customers

In a market where consumers have cognitive limitations (for example, where they forget bad experiences, or frequently resort to cognitively cheap heuristics) - and where quality is costly - firms that cheat on price signals will win out.

Even if the firms are just retailers, instead of manufacturers.

Who polices the quality controllers, in a market where customers are forgetful, and not very clever?

An even bigger role for the incentive to 'be good' and not to 'reward bad behaviour'. What makes people 'good'?

1 comment:

Olly Tuck said...

Quis custodiet ipsos custodes?
Is Michael O'Leary of Ryanair a 'good' man?
He gives the people what they want doesn't he? - cheap flights and no frills.
Hmm..sorry,three question mark's and not much insight,argument or answers,I'm afraid.
I will come back to this or another blog one day.