Quantifying heterogeneity in consumers' misperceptions of product costs is crucial for policy design. We illustrate this point in the energy context and the design of Pigouvian policies. We estimate non-parametric distributions of perceptions of energy costs in the U.S. appliance market using a...

The behavioral responses to taxes and subsidies are often subject to various behavioral biases and transaction costs - what we define as "microfrictions". We develop a theoretical framework to show how these microfrictions - and their heterogeneity across the population and policy instruments -...

The behavioral responses to taxes and subsidies are often subject to various behavioral biases and transaction costs - what we define as "microfrictions". We develop a theoretical framework to show how these microfrictions - and their heterogeneity across the population and policy instruments -...

Quantifying heterogeneity in consumers' misperceptions of product costs is crucial for policy design. We illustrate this point in the energy context and the design of Pigouvian policies. We estimate non-parametric distributions of perceptions of energy costs in the U.S. appliance market using a...