"Waste not want not" expresses our culture's aversion to waste. "I could have gotten the same thing for less" is a sentiment that can diminish pleasure in a transaction. We study people's willingness to "pay" to avoid this spoiler. In one scenario, participants imagined they were looking for a...

A small lie appears trivial but it obviously violates moral commandments. We analyze whetherthe preference for others’ truth telling is absolute or depends on the size of a lie. In a laboratoryexperiment we compare punishment for different sizes of lies controlling for the resultingeconomic...

We study the idea that seemingly unrelated behavioral biases can coevolve if they jointly compensate for the errors that any one of them would give rise to in isolation. We suggest that the "endowment effect" and the "winner's curse" could have jointly survived natural selection together. We...

A leading approach to understanding significant discrepancies between observed willingness to pay (WTP) and willingness to accept (WTA) in policy evaluation is the “endowment effect” — that preferences are based on a reference point or anchor that leads WTA to exceed WTP. Unlike assertions...

The consequences of many economic decisions only materialize in the future. To make informed choices in such decision problems, consumers need to anticipate the likelihood of future states of the world, the state-dependence of their preferences, and the choice alternatives that may become...