This chapter surveys the literature on behavioral industrial organization, covering four broad
topics:(1) how rational firms interact with consumers who make systematic mistakes in …

We document the hidden costs of a popular nudge and show how these costs distort policy
making when neglected. In a field experiment with a charity, we find reminders increasing …

Two leaders in the field explore the foundations of bounded rationality and its effects on
choices by individuals, firms, and the government. Bounded rationality recognizes that …

We study a search market where firms may design products of inferior quality to promote
them to naive consumers who misjudge product characteristics. We derive an equilibrium in …

Automatic contract renewals are a common feature in consumer markets. Since these
contracts renew automatically unless a consumer actively cancels, firms can use them to …

We develop models of markets with procrastinating consumers where competition operates-
or is supposed to operate-both through the initial selection of providers and through the …

We study the interplay between deception and consumer search in a search market where
firms may deceive some naive consumers with inferior products that display hidden (bad) …

In a retail financial market, firms strategically choose whether to commit financial fraud to
exploit naive investors who are unaware of such practices. In a leader-follower setting, we …

Passive behavior is ubiquitous-even when facing various alternatives to choose from,
people commonly fail to take decisions. This paper provides evidence on the cognitive …

We study the incentives for firms' obfuscation strategies and their impact on social welfare in
a market with boundedly rational consumers. We assume that firms obfuscate product …