Effects of price of zero on decision making: An attempt to generalize human’s irrational behavior to price of zero

Atsuo Murata, Yasunari Matsushita, Makoto Moriwaka

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

When (a − 1)X = Z, the zero-price effect was observed only for (a: large, X: small) and (a: small, X: small). When X was small, the zero-price effect was observed irrespective of the value of a. When X was large, the zero-price effect was not observed. Human behavior tend to deviate from irrational behavior assumed in traditional economics for small values of X irrespective of a. The price of zero must be irrationally chosen due to the overestimation of price of zero. When (a − 1)X > Z, the zero-price effect was observed only for (a: large, X: large) and (a: large, X: small). When a was large, the zero-price effect was observed irrespective of whether X was large or small. When a was small, the zero-price effect was not observed. Human behavior tend to deviate from irrational behavior assumed in traditional economics for large values of a irrespective of the value of a. In this manner, it has been indicated that the zero-price effect is not necessarily observable and holds under limited conditions.

Original languageEnglish
Title of host publicationAdvances in Cross-Cultural Decision Making - Proceedings of the AHFE International Conference on Cross-Cultural Decision Making, CCDM 2016
PublisherSpringer Verlag
Pages109-116
Number of pages8
Volume480
ISBN (Print)9783319416359
DOIs
Publication statusPublished - 2017
EventInternational Conference on Cross Cultural Decision Making, CCDM 2016 - Walt Disney World, United States
Duration: Jul 27 2016Jul 31 2016

Publication series

NameAdvances in Intelligent Systems and Computing
Volume480
ISSN (Print)21945357

Other

OtherInternational Conference on Cross Cultural Decision Making, CCDM 2016
Country/TerritoryUnited States
CityWalt Disney World
Period7/27/167/31/16

Keywords

  • Cognitive bias
  • Decision making
  • Irrational behavior
  • Price of zero

ASJC Scopus subject areas

  • Control and Systems Engineering
  • Computer Science(all)

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