Tuesday, March 8, 2022

Heterogeneous consumer preferences for product quality and uncertainty

Heterogeneous consumer preferences for product quality and uncertainty

By:

Wolfgang Maennig (Chair for Economic Policy, University of Hamburg); Steffen Q. Mueller (Chair for Economic Policy, University of Hamburg)

Abstract:

We provide evidence for heterogeneous consumer preferences for product quality and game outcome uncertainty (GOU) in Major League Baseball. Using attendance data from 2013 to 2019, we explore func-tional data clustering techniques to detect common patterns in predictive margins of team-specific win-ning probability. As a central result, we identify five groups of teams with similar GOU effects. However, only a few teams’ fans show GOU preferences that resemble the typical hump-shape that is postulated by the uncertainty of outcome hypothesis; the largest cluster is comprised of teams with fans whose at-tendance behavior is relatively insensitive to differences in GOU.

https://lawprofessors.typepad.com/antitrustprof_blog/2022/03/heterogeneous-consumer-preferences-for-product-quality-and-uncertainty.html

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