We present a new partial equilibrium theory of price adjustment, based on consumer loss aversion. In line with prospect … theory, the consumers' perceived utility losses from price increases are weighted more heavily than the perceived utility … depends on the consumers' rational price expectations from the recent past. By implication, demand responses are more elastic …

find substantial demand (~ 60% uptake) even when consumers were charged a price equal to the premium the government paid …

help. This hypothesis is examined for the case of demand for hospital care which covers the largest part of public …

expenses. Using panel data and a non-linear difference-in-differences strategy, we find a demand elasticity of about -0 …