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Prior theoretical research has shown that a Name-Your-Own-Price (NYOP) seller can profit from charging each prospective buyer a non-refundable fee for the opportunity to place a bid, akin to an entry fee to the seller’s store. We examine the profitability of such two-part tariffs in NYOP markets using incentive-compatible laboratory experiments. Overall, our results suggest two-part tariffs increase NYOP profit in a standard information-poor setting in the short run, but they are not as profitable as theory would suggest when the bidders get more information or experience. We also propose an individual-level non parametric test of the risk-averse expected utility model, and the test results suggest that this canonical model for decision making under uncertainty is not a good fit to the behavior of a substantial proportion of our subjects.

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Unpacking the Inequality Paradox: The Psychological Roots of Inequality and Social Class

Image AddedPaul Piff, Professor, Department of Psychological Science, University of California Irvine

Synopsis

What is social about social class? How does money shape the mind, how people think about themselves and behave toward others? This talk will highlight the emerging psychological science of social class. I will describe studies showing that social class exerts a pervasive influence on the social realm, critically shaping emotions, morality, social relationships, materialism, and consumption.

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