In the presence of naive consumers, a participation distortion arises in competitive markets
because the additional profits from naive consumers lead competitive firms to lower …

We study the welfare effects of an increase in firms' information about consumer naivete in a
simple reduced-form model in which competitive firms can introduce distortionary fees that …

In a model of a competitive industry selling base goods and add-ons, we investigate the
conditions under which citizen-consumers will support policies that eliminate behavioral …

Recent work has explored the implications of consumer biases for firm behavior and has
documented that profit-maximizing firms exploit consumer biases in the contracts they offer …

We analyze a market where some consumers only consider buying from a specific seller
while other consumers choose the best deal from several sellers. When sellers are able to …

This report was commissioned by the Office of Fair Trading (OFT) from London Economics in
association with Steffen Huck and Jidong Zhou (University College London). It examines the …

This paper investigates the welfare implications of banning the no surcharge rule (NSR) in
credit card markets. Conventional wisdom indicates that banning the NSR may increase or …

We address the effect of expectation‐based consumer loss aversion on firm strategy in
imperfect competition. Consumers are fully informed about match value and price at the …

We introduce three types of consumer recognition: identity recognition, asymmetric
preference recognition, and symmetric preference recognition. We characterize price …

We develop a theory of imperfect competition with loss-averse consumers. All consumers
are fully informed about match value and price at the time they make their purchasing …