Information goods and the left-digit bias a) Give a real-world example of an information good priced in a way to take advantage of the left-digit bias (provide a web link to the example) b) Information goods have properties that can lead to market failures. What are two solutions that exist in this market that address market failures associated with information goods. c) Briefly describe the left-digit bias and draw how the demand curve is likely to look like if the consumers of the good in your example are left-digit biased. d) Suppose the seller of this good is interested in understanding the causal effect of left-digit bias pricing on revenues. Describe how the seller might be able to use any two of the four empirical methods (randomised experiment, instrumental variable, difference-in-differences, regression discontinuity) presented in the lectures for this purpose. For each method, describe the data you would need and discuss the potential limitations/challenges of applying that method.
Information goods and the left-digit bias
a) Give a real-world example of an information good
b) Information goods have properties that can lead to market failures. What are two solutions that exist in this market that address market failures associated with information goods.
c) Briefly describe the left-digit bias and draw how the
d) Suppose the seller of this good is interested in understanding the causal effect of left-digit bias pricing on revenues. Describe how the seller might be able to use any two of the four empirical methods (randomised experiment, instrumental variable, difference-in-differences, regression discontinuity) presented in the lectures for this purpose. For each method, describe the data you would need and discuss the potential limitations/challenges of applying that method.
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