Abstract
Consumers frequently make decisions in markets characterised by complex pricing, dispersed information, and search costs. In such environments, even well-intentioned policy interventions may fail to improve outcomes if consumers struggle to identify, interpret, or act upon relevant information. This session brings together three papers that examine how consumers respond to information and incentives in complex markets, and what these responses imply for public policy.
The first two papers focus on international money transfer markets, where pricing is often difficult to compare due to fees, exchange-rate margins, and heterogeneous disclosure practices. Using large-scale online experiments, these studies investigate how calculator design, price transparency, and information disclosure influence consumer understanding, search behaviour, and decision quality. Together, they provide new evidence on the effectiveness of alternative information interventions and identify conditions under which consumers achieve better outcomes.
The third paper examines household behaviour in retail gasoline markets, combining detailed household expenditure data with station-level prices to study how consumers respond to both spatial and temporal price dispersion. It develops and estimates a demand model to examine how temporal and spatial frictions shape demand elasticities across the income distribution, as well as the associated implications for the distributional effects of market power.
Collectively, these papers highlight the importance of information frictions, search behaviour, and market complexity in shaping consumer outcomes, offering insights for the design of effective behavioural public policy interventions.