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Export Performance of Bangladesh's Fisheries Sector
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Export Performance of Bangladesh's Fisheries Sector
Export Performance of Bangladesh's Fisheries Sector
BH
Belayet Hossain
Belayet Hossain
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1 March 2006
journal article
Published by
Project MUSE
in
The Journal of Developing Areas
Vol. 39
(2)
,
63-77
https://doi.org/10.1353/jda.2006.0005
Abstract
Many firms divide the price a consumer pays for a good into two pieces - the price for the item itself and the price for shipping and handling. With fully rational customers, the exact division between the two prices is irrelevant - only the total price matters. We test this hypothesis by selling matched pairs of CDs and Xbox games in a series of field experiments on eBay. In theory, the ending auction price should vary inversely with the shipping charge to leave the total price paid constant. Contrary to the theory, we find that charging a high shipping cost and starting the auction at a low opening price leads to higher numbers of bidders and higher revenues when the shipping charge is not excessive. We show that these results can be accounted for by boundedly rational bidding behavior such as loss-aversion with separate mental accounts for different attributes of the price or disregard for shipping costs. Copyright © 2006 The Berkeley Electronic Press. All rights reserved
Keywords
AUCTION
ACCOUNTED
BEHAVIOR
TOTAL PRICE
SHIPPING CHARGE
SHIPPING COST
EXACT DIVISION
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Open Access
Cited by 4 articles