Is the Price Right? The Role of Economic Tradeoffs in Explaining Reactions to Price Surges /
Elias, Julio J.
Is the Price Right? The Role of Economic Tradeoffs in Explaining Reactions to Price Surges / Julio J. Elias, Nicola Lacetera, Mario Macis. - Cambridge, Mass. National Bureau of Economic Research 2022. - 1 online resource: illustrations (black and white); - NBER working paper series no. w29963 . - Working Paper Series (National Bureau of Economic Research) no. w29963. .
April 2022.
Public authorities often introduce price controls in response to price surges, potentially causing inefficiencies and shortages. In a survey experiment with 7,612 Canadian and US respondents, we find that unregulated price increases cause general disapproval and strong moral reactions. However, acceptance is higher, and demand for regulation lower, when potential economic tradeoffs between controlled and unregulated prices are salient, and if the incentives resulting from price surges ultimately enhance access to goods. Highlighting tradeoffs also reduces the polarization of moral reactions between supporters and opponents of unregulated pricing. Text analysis of open-ended answers further supports our findings, and a donation experiment shows consistency between stated and revealed preferences.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Survey Methods • Sampling Methods
Laboratory, Individual Behavior
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
Analysis of Health Care Markets
General
Cultural Economics • Economic Sociology • Economic Anthropology
Is the Price Right? The Role of Economic Tradeoffs in Explaining Reactions to Price Surges / Julio J. Elias, Nicola Lacetera, Mario Macis. - Cambridge, Mass. National Bureau of Economic Research 2022. - 1 online resource: illustrations (black and white); - NBER working paper series no. w29963 . - Working Paper Series (National Bureau of Economic Research) no. w29963. .
April 2022.
Public authorities often introduce price controls in response to price surges, potentially causing inefficiencies and shortages. In a survey experiment with 7,612 Canadian and US respondents, we find that unregulated price increases cause general disapproval and strong moral reactions. However, acceptance is higher, and demand for regulation lower, when potential economic tradeoffs between controlled and unregulated prices are salient, and if the incentives resulting from price surges ultimately enhance access to goods. Highlighting tradeoffs also reduces the polarization of moral reactions between supporters and opponents of unregulated pricing. Text analysis of open-ended answers further supports our findings, and a donation experiment shows consistency between stated and revealed preferences.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Survey Methods • Sampling Methods
Laboratory, Individual Behavior
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
Analysis of Health Care Markets
General
Cultural Economics • Economic Sociology • Economic Anthropology