London Economics

London Economics was comissioned by the Office of Fair Trading to undertake a behavioural economics study into how different price frames may impact upon consumer behaviour. The study uses experimental economics to test if consumers incur behavioural biases under five common pricing practices used by firms, including drip pricing and “3 for 2″ offers. The observations from the experiment show that consumers do indeed suffer from behavioural biases including loss aversion and endowment effects.