Düsseldorf- The Düsseldorf Institute for Competition Economics (DICE/HHU) and the Heinrich Heine University Düsseldorf (HHU) are receiving funding from the German Research Foundation (DFG) and the Austrian Science Fund (FWF) for the project "Consumer Preferences, Consumer Mistakes, and Firm's Response" amounting to 2.25 million euros over a period of four years. The research group consists of twelve scientists from the universities of Düsseldorf, Münster, Berlin (ESMT), Heidelberg, Frankfurt and Vienna. The spokesperson is the economist Prof. Dr. Paul Heidhues (HHU/DICE).
Profit-oriented companies use a variety of strategies such as cancellation barriers, misleading product information or hidden contract clauses with additional costs to sell consumers products that are overpriced and useless to them. According to studies, poorer, older or less educated people are particularly affected.
The research group "Consumer Preferences, Consumer Mistakes, and Firm's Response" wants to analyse valid patterns here with self-developed dynamic methods: Existing structural econometric market models of imperfect competition are extended by behavioural economic insights, significant dynamic aspects are built into the (at the current state of research mostly static) behavioural economic competition models. Thus, for the first time, numerous inherently dynamic questions - such as the causes and effects of consumer inertia or consumer learning over time - can be better understood. In addition, formal models of the digital economy are supplemented with psychological aspects in order to better understand both purchasing behaviour and the advantages and disadvantages of various regulatory proposals in this area. The goal: to develop regulatory approaches to prevent or at least limit such exploitative strategies.
"I am pleased that the DFG and the FWF have recognised the importance of the project and are providing us with the necessary funds to research the exploitation of consumer errors in the marketplace," explains project spokesperson Prof. Dr. Paul Heidhues.
The following scientists are involved in the project:
Prof. Özlem Bedre-Defolie, PhD, ESMT Berlin
Prof. Dr. Markus Dertwinkel-Kalt, Universität Münster
Prof. Dr. Sebastian Ebert, Universität Heidelberg
Associate-Prof. Dr. Andreas Grunewald, Frankfurt School
Prof. Dr. Paul Heidhues, Universität Düsseldorf
Prof. Dr. Florian Heiss, Universität Düsseldorf
Prof. Dr. Heiko Karle, Frankfurt School
Prof. Dr. Hans-Theo Normann, Universität Düsseldorf
Prof. Dr. Markus Reisinger, Frankfurt School
Jun.-Prof. Dr. André Romahn (tenure track), Universität Düsseldorf
Prof. Dr. Hannah Schildberg-Hörisch, Universität Düsseldorf
Prof. Dr. Christine Zulehner, Universität Wien