The Effect of Product Misperception on Economic Outcomes: Evidence from the Extended Warranty Market
利用面板和实验数据，发现延长保修市场的强劲需求和高利润源于消费者高估产品故障概率，而非风险厌恶或卖方市场势力；向消费者提供故障概率信息能显著降低其购买意愿，且比增加市场竞争更能提升消费者福利。
Abstract Panel and experimental data are used to analyse the economic outcomes in the extended warranty market. We establish that the strong demand and high profits in this market are driven by consumers distorting the failure probability of the insured product, rather than standard risk aversion or sellers’ market power. Providing information to consumers about failure probabilities significantly reduces their willingness to pay for warranties, indicating the important role of information, or lack of, in driving consumers’ purchase behaviour. Such information provision is shown to be more effective in enhancing consumer welfare than additional market competition.