Can Consumers Learn Price Dispersion? Evidence for Dispersion Spillover across Categories

Price knowledge is a key antecedent of many consumer judgments and decisions. This article examines consumers’ ability to form accurate beliefs about the minimum, the maximum, and the overall variability of prices for multiple product categories. Eight experiments provide evidence for a novel phenomenon we call dispersion spillover: Consumers tend to overestimate price dispersion in a category after encountering another category in which prices...