Students Seminar

Thiago Cacicedo

Universidad de Alicante


Seminar 1 – 14:30


I study how the price expectation regarding future prices affects consumer purchase behaviour for frequently, non-durable, purchased goods. Using a standard dynamic model of utility maximisation I show how current purchase depends on expectation about future prices. Then, I use scanner data to provide reduced-form evidence on which type of expectation, among those commonly used in the literature, is consistent with the data. I find that, on average consumers are rational, but there is some degree of heterogeneity in price expectations.

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