We design an experiment to test the hypothesis that, in violation of Bayes Rule, some people respond more forcefully to the strength of information than to its weight. We provide incentives to motivate effort, use naturally occurring information, and control for risk attitude. We find that the...

Consumers are often confronted with choices between options that vary in their short and long term benefit, or what we call immediate and delayed utility. This paper describes the marketing implications of what economists and psychologists have learned about how consumers make these choices. The...

In intertemporal choice experiments people usually choose between smaller-sooner and larger-later amounts of money. That is, they make tradeoffs in terms of nominal amounts. Yet the factor governing intertemporal tradeoffs in the marketplace is usually the interest rate. In this study, we tested...

Extended warranties are popular but expensive. This paper examines how consumers value these warranties, and asks whether economic considerations alone can account for their popularity. Results from two field surveys show that consumers greatly overestimate both the likelihood and the cost of...

In cases of conflict of interest, people can lie directly about payoff relevant private information, or they can evade the truth without lying directly. We analyse this situation theoretically and test the key predictions in an experimental sender-receiver setting. We find senders prefer to...