International Economics
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Customer Knowledge and the Price-quality Gradient

Lore Vandewalle
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Geneva Graduate Institute, Maison de la paix, Room S4

As part of the Vilfredo Pareto Research Seminar series, the International Economics Department at the Geneva Graduate Institute is pleased to invite you to a public talk given by Lore Vandewalle.

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Customer Knowledge and the Price-quality Gradient, joint with Julia Cajal-Grossi and Christopher Woodruff


How can firms in low-income countries be incentivized to upgrade quality? One pathway is providing access to foreign customers with a higher income, a demand for quality and access to information about achieving such quality. However, this route is only available to a small fraction of firms in low-income countries. As income levels and preferences are hard to treat at scale, improving the “savviness” of domestic customers becomes the only policy instrument to change the demand for quality provision. Armstrong and Chen (2009) show theoretically that boosting the share of savvy consumers can increase aggregate quality, producer surplus and overall welfare. We conducted a framed field experiment in Uganda, showing that a simple information-provision intervention can indeed improve the ability of consumers to discern quality.


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