Households that fail to refinance their mortgage when interest rates decline can lose out on substantial savings. Based on a large random sample of outstanding U.S. mortgages in December of 2010, we estimate that approximately 20% of households for whom refinancing would be optimal and who...

Projection bias is the tendency to overpredict the degree to which one's future tastes will resemble one's current tastes. We test for evidence of projection bias in two of the largest and most important consumer markets - the car and housing markets. Using data for more than forty million...

Walmart often faces strong local opposition when trying to build a new store. Opponents often claim that Walmart lowers nearby housing prices. In this study we use over one million housing transactions located near 159 Walmarts that opened between 2000 and 2006 to test if the opening of a...

Can raising awareness of racial bias subsequently reduce that bias? We address this question by exploiting the widespread media attention highlighting racial bias among professional basketball referees that occurred in May 2007 following the release of an academic study. Using new data, we...

We investigate whether the first digit of an odometer reading is more salient to consumers than subsequent digits. We find that retail transaction prices and volumes of used vehicles drop discontinuously at 10,000-mile odometer thresholds, echoing effects found in the wholesale market by...

In many education and work environments, economic agents must perform several mental tasks in a short period of time. As with physical fatigue, it is likely that cognitive fatigue can occur and affect performance if a series of mental tasks are scheduled close together. In this paper, we...

A large body of research has explored the importance of auction design and information structure for auction outcomes. Much less work has considered the importance of the auction process. For example, in many auctions, auctioneers are present and can impact the process of the auction by varying...

Models of reference-dependent preferences propose that individuals evaluate outcomes as gains or losses relative to a neutral reference point. We test for reference dependence in a large dataset of marathon finishing times (n = 9,524,071). Models of reference-dependent preferences such as...

Colleges rely on the ACT exam in their admission decisions to increase their ability to differentiate between students likely to succeed and those that have a high risk of under-performing and dropping out. We show that two of the four sub tests of the ACT, English and Mathematics, are highly...

Can heuristic information processing affect important product markets? We explore whether the tendency to focus on the left-most digit of a number affects how used car buyers incorporate odometer values in their purchase decisions. Analyzing over 22 million wholesale used-car transactions, we...