Last February 22nd, the Applied Economics & Policy Seminar of the Charles H. Dyson School of Applied Economics and Management at Cornell, was hosted by me and Miguel Gomez with guest speaker Dr. Vincenzina Caputo.
She is an Assistant Professor at the Department of Agricultural, Food, and Resource Economics of Michigan State University and her research incorporates insights from experimental and behavioral economics to model consumer choice behavior and demand for novel food products and food technologies. In the last years, she has developed theoretical and empirical approaches to explore a number of behavioral issues related to the decision-making process, using sophisticated experimental settings and advanced random utility models.
The seminar, which was attended by over 80 master students of Dyson and Faculty members, was focusing on the Effects of Reference Price and Reference Price Uncertainty on Consumer Food Choice Behavior. In specific, she started explaining how models of consumer decision making commonly incorporate reference-dependent preferences. In these models, the reference point is typically assumed to be known by the consumer. However, she highlighted how research on price recall and the reference formation process reveals that the reference price is often uncertain at the time of purchase.
During the seminar, Dr.Caputo presented in details two studies on the effects of reference price and reference price uncertainty on consumer food choice behavior will be presented. Both studies used economic experiments and derive conceptual models. In conclusions, their findings highlight the need to understand the formation and distribution of reference prices when predicting consumer choice. The seminar was highly appreciated by the audience which asked many questions and details throughout the two-hour presentation. During her visit at Cornell, Dr. Caputo had the pleasure to meet many researchers from several departments and also international visiting scholars like Martina Cirelli, a research assistant from the Department of Food and Drug of the University of Parma, in Italy.
If you are interested in finding out more about this topic and her results, you can read the paper, co-authored with Jayson Lusk and Rodolfo Nayga, entitled “Choice experiments are not conducted in a vacuum: The effects of external price information on choice behavior” and published in the Journal of Economic Behavior & Organization.