The Law of Demand and the Loss of Confidence Effect: An Experimental Study

@article{33789,
   author = {Mazurek, Jiří and Perez Rico, Cristina and Fernandez Garcia, Carlos},
   article_number = {11},
   doi = {http://dx.doi.org/10.1016/j.heliyon.2019.e02685},
   keywords = {demand function; price elasticity of demand; irrationality; loss of confidence and experimental study},
   language = {eng},
   issn = {2405-8440},
   journal = {Heliyon},
   title = {The Law of Demand and the Loss of Confidence Effect: An Experimental Study},
   url = {https://www.sciencedirect.com/science/article/pii/S2405844019363455},
   volume = {5},
   year = {2019}
}

TY  - JOUR
ID  - 33789
AU  - Mazurek, Jiří - Perez Rico, Cristina - Fernandez Garcia, Carlos
PY  - 2019
TI  - The Law of Demand and the Loss of Confidence Effect: An Experimental Study
JF  - Heliyon
VL  - 5
IS  - 11
SP  - 1-6
EP  - 1-6
SN  - 24058440
KW  - demand function
KW  - price elasticity of demand
KW  - irrationality
KW  - loss of confidence and experimental study
UR  - https://www.sciencedirect.com/science/article/pii/S2405844019363455
L2  - https://www.sciencedirect.com/science/article/pii/S2405844019363455
N2  - The aim of this article is to examine the possibility that a market demand function (curve) might not be monotonically decreasing in its entire domain according to the consumer theory neoclassical as assumed by the law of demand (for normal goods). This may happen due to limited rationality of (some) consumers and the anchor price effect. When a price of a good decreases to some point, the amount demanded might stops increasing due to the loss of confidence effect: consumers’ unwillingness to buy a too cheap product. The existence of this effect was examined via questionnaire on a sample of 377 undergraduate university students from the Czech Republic, Ecuador and Spain. The main result of this experimental study is that the loss of confidence effect appeared at all three locations, which indicates that the law of demand may not be valid in its entire domain. Furthermore, the results of this study imply that a significant percentage of people make decisions of limited rationality even when facing a very simple task. In addition, statistically significant difference in rational behavior with respect to gender was found.
ER  - 

MAZUREK, Jiří, Cristina PEREZ RICO a Carlos FERNANDEZ GARCIA. The Law of Demand and the Loss of Confidence Effect: An Experimental Study. \textit{Heliyon}. roč.~5, č.~11, s.~1-6. ISSN~2405-8440. doi:10.1016/j.heliyon.2019.e02685. 2019.