We study the welfare performance of various simple monetary policy rules under bounded rationality (BR) along the lines of Gabaix (2020) in a New Keynesian model with sticky wages and an effective lower bound (ELB) on interest rates. Policy strategies with a strong history dependence lose their...

We study the impact of market incompleteness and bounded rationality on the effectiveness of make-up strategies. To do so, we simulate a heterogeneous-agent New Keynesian (HANK) model with reflective expectations and an occasionally-binding effective lower bound (ELB) on the policy rate. Our...

There are many important decision problems where learning through experimentation is costly or impossible. In these situations, individuals may try to learn from observing the outcomes of others who have made similar decisions. Often, however, information about others comprises a selected...

This paper presents a novel approach to analyze human decision-making that involves comparing the behavior of professional chess players relative to a computational benchmark of cognitively bounded rationality. This benchmark is constructed using algorithms of modern chess engines and allows...

Behavioural welfare economics provides tools to elicit welfare preferences when individuals use nonstandard behavioural models. Current proposals either require assumptions on the models or elicit preferences that become coarser and coarser as the dataset grows. We propose an informational...

Mainstream economists are reluctant to integrate features of bounded rationality into their behavioural assumptions. However, particularly in the field of economic policy the scope for irrational behaviour is given, since voters lack incentives for rational reasoning concerning their voting...

Platforms often display their products ahead of third-party products in search. Is this due to consumers preferring platform-owned products or platforms engaging in self-preferencing by biasing search towards their own products? What are the welfare implications? I develop a structural model of...

With the completion of the Uruguay Round of international trade negotiations, attention turns to plausible next steps. One question on the agenda of possibilities is the adoption of competition policies that complement or substitute for the remedies traditionally used to deal with international...