This paper studies the role of product availability in attracting consumer demand. We start with a newsvendor model, but additionally assume that stockouts are costly to consumers. The seller sets an observable price and an unobservable stocking quantity. Consumers anticipate the likelihood of...

Macroeconomic models often invoke consumption "habits" to explain the substantial persistence of macroeconomic consumption growth. But a large literature has found no evidence of habits in the microeconomic datasets that measure the behavior of individual households. We show that the apparent...

We consider a network market where firms can covertly extract additional revenues from consumers, which we refer to as “obfuscation”. We examine why even consumers who are aware of obfuscation (“sophisticates”) continue to stick to obfuscating networks. Depending on the relation between...

A frequent feature of information structures is that they generate signals which are not mutually independent, but rather rely on a common set of underlying information. Using a simple experimental design, we show that in such contexts many people neglect correlations in the updating process,...

We propose a model of instrumental belief choice under loss aversion. When new information arrives, an agent is prompted to abandon her prior. However, potential posteriors may induce her to take actions that generate a lower utility in some states than actions induced by her prior. These losses...

This paper provides unique survey evidence on consumer awareness about deposit insurance. We find that knowledge on the eligibility for deposit insurance is limited, in particular when it concerns small banks. In addition, consumers generally expect an associated payback time that well exceeds...

This article questions the rather pessimistic conclusions of Allen and Carroll (2001) about the ability of consumer to learn the optimal buffer-stock based consumption rule. To this aim, we develop an agent based model where alternative learning schemes can be compared in terms of the...

Panel conditioning occurs when participation in previous survey rounds affects how respondents answer questions in later rounds. I document panel conditioning effects in reported inflation expectations and other responses in the Federal Reserve Bank of New York Survey of Consumer Expectations....

Does consumer sentiment change upon hearing news about fiscal budget deficit? Using U.S. consumer survey data from 1978 to 2018, we find consumer sentiment increases (decreases) significantly upon hearing favourable (unfavourable) fiscal deficit news. This effect is pervasive across our sample...

We propose a model of instrumental belief choice under loss aversion. When new information arrives, an agent is prompted to abandon her prior. However, potential posteriors may induce her to take actions that generate a lower utility in some states than actions induced by her prior. These losses...