UC Berkeley

This dissertation contributes to the literature of using field experiments to test and develop theories of consumer behavior. In Chapter One, my coauthors and I partner with the YMCA to analyze how public recognition for exercise affects consumer's utility. We find that while it motivates positive behavior change, it creates highly unequal payments, with low performers losing a lot of utility from having their exercise habits publicly shared. In Chapter Two, my coauthor and I use an online shopping experiment to study how consumers (mis)react to sales taxes. We find evidence consistent with the theory that consumers using heterogeneous rules of thumb to compute the opaque tax when the stakes are low, but using costly mental effort at higher stakes. The results allow us to differentiate between various economic theories of limited attention. In Chapter Three, my coauthor and I partner with an online apparel retailer to study the consequences of offering a one-time price discount to consumers, with a particular focus on consumer beliefs. We find that the net effect was no significant difference in revenue, order frequency or profit from the two groups in our experiment. We further find that price discounts do not change the perceived value of the brand or quality of the product, which contradicts many existing economic theories.