This is a sketch of a model of a market in which most but not all consumers use a rank-based decision rule to choose between products. Prod-ucts in the market are distinguished by price (which is observable) and quality (which is not). The novel feature (which differentiates us from Prelec et al., 1997) is that consumers observe the market share of each product. We explain why this assumption is plausible. Each rank-choosing consumer has a 'preferred' rank by price (e.g. prefers to buy at the 25th percentile of price). Some proportion of consumers act on neoclassical preferences. Under certain assumptions, the model has a unique equilibrium in which *all* consumers act as if they had neoclas-sical preferences. Thus, all results in the standard theory of oligopoly still apply. On one interpretation, rank-choosing is an efficient heuristic for satisfying 'true' preferences when information is limited. On another, it shows how regularities in behaviour at the market level can be in-duced even if individuals do not have well-articulated preferences.
Join us for light refreshments (coffee/tea and biscuits) before the Forum at 2.15 p.m.
This event is free and open to public: go.warwick.ac.uk/draw