The current paper addresses a mechanism that encourages the bundle consumption of two substitute goods in a partially differentiated duopoly. Assuming consumer loss aversion à la Kőszegi and Rabin (2006), we develop a bait-and-switch model, where a seller offers a discount in limited...

We study how capital investors are treated in a society that includes, but is not limited to, investors. We show that investors are taxed, which causes inefficiently low investments, under poor economic conditions, whereas are subsidized, which causes inefficiently high investments, under good...

Vote trading in power-sharing systems -i.e., systems in which a voter's utility with respect to the election's outcome is proportional to the vote share of her favourite party- is, in theory, welfare improving. However, trading votes for money in majoritarian systems may have detrimental welfare...