CDR Seminar: Ed Webb - "Eye-tracking, salience theory and consumer choice"

Abstract:

We report results from an eye-tracking experiment designed to study a violation of revealed preference predicted by salience theory: Individuals choose a low quality good with a low price level and a high quality good with a high price level, despite the price of the quality premium being held constant. Subjects exhibited a significant number of such preference reversals (16.12% of decisions). However, the eye-tracking hypotheses, which test the underlying mechanism of salience theory are all rejected. More reversals were observed with hypothetical than incentivized choice (22.11% vs. 10.12% of decisions). Attending to the price of a good was found to bias subjects in favour of purchasing it.

Authors: Andreas Gotfredsen, Carsten S. Nielsen, Alexander Sebald and Edward J.D. Webb

About the speaker:

Edward is an economist who has recently joined the Academic Unit of Health Economics at the University of Leeds. His research interests are studying patient preferences and medical decision-making, including incorporating non-rationality, using stated preference experiments.

Previous to this he was a PhD student at the Department of Economics, University of Copenhagen where his thesis was on attentional and perceptual biases in economic decision-making and interactions.