The large and persistent deviations of nominal exchange rates from their purchasing power parities comprise a key stylized fact in international economics. This paper sheds light on these persistent deviations by combining two disparate strands of empirical work. The first strand focuses on real...

Existing literature in economics and psychology has documented that individuals care about their social image. However, most of the existing evidence is based on laboratory experiments, where the concern for social image is artificially induced. We hand-collect a unique data set on restaurant...

The large and persistent deviations of nominal exchange rates from their purchasing power parities comprise a key stylized fact in international economics. This paper sheds light on these persistent deviations by combining two disparate strands of empirical work. The first strand focuses on real...