Is the Price Right? The Role of Economic Tradeoffs in Explaining Reactions to Price Surges / Julio J. Elias, Nicola Lacetera, Mario Macis.

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Elias, Julio J

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w29963.Publication details: Cambridge, Mass. National Bureau of Economic Research 2022.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: 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.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w29963 (Browse shelf(Opens below))	Not For Loan

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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.