We study the public policy implications of a model in which agents do not fully internalize all the conscequences of their actions. Such a model unifies seemingly disconected models with behavioral agents. We evaluate the scope of paternalistic and libertarian-parternalistic policies in light of...

Allowing for the possibility that individuals may not always act in their best interest, what is the connection between choice and welfare? This paper addresses this concern by studying the normative implications of a general model of individual decision-making that allows for suboptimal...

If decision-makers (DMs) do not always do what is in their best interest, what do choices reveal about welfare? This paper shows how observed choices can reveal whether the DM is acting in her own best interest. We study a framework that relaxes rationality in a way that is common across a...