This paper reformulates and simplifies a recent model by Heidhues and Kőszegi (The impact of consumer loss aversion on pricing, Mimeo, <CitationRef CitationID="CR5">2005</CitationRef>), which in turn is based on a behavioral model due to Kőszegi and Rabin (Q J Econ 121:1133–1166, <CitationRef CitationID="CR11">2006</CitationRef>). The model analyzes optimal pricing when...</citationref></citationref>

A group of n "quacks" plays a price-competition game, facing a continuum of "patients" who recover with probability α, whether they acquire a quack's "treatment". If patients chose rationally, the market would be inactive. I assume, however, that patients choose according to a boundedly...

I explore the idea that people care about the justifiability of their decisions in the context of two-person extensive games. Each player justifies his strategy s with a belief b of the opponent's strategy, which is consistent with the play path and maximally plausible (according to some...

The paper presents a notion of rationalizing choice functions that violate the “Independence of Irrelevant Alternatives” axiom. A collection of linear orderings is said to provide a rationalization by multiple rationales for a choice function if the choice from any choice set can be...

This article studies market competition when firms can influence consumers' ability to compare market alternatives through their choice of price "formats." In our model, the ability of a consumer to make a comparison depends on the firms' format choices. Our main results concern the interaction...