Many countries regulate the quality of food and drugs, yet it remains unclear whether markets can be relied upon to deliver high quality in the absence of regulation, notably where companies can advertise the superior quality of their products. We present evidence from two field experiments in...

Evidence increasingly points to the importance of reference-dependence in predicting consumer behavior. We utilize detailed data from penny auctions, which first appeared as an internet phenomenon in the late 2000's, to uncover how consumers' prior experiences predict their willingness to try a...

The idea that consumers are rational decision makers, who carefully consider options when making a decision about a certain phenomenon, will soon phase out! Believe it or not. In a bid to better understand the consumer, a myriad of economists still waste their precious time on “not-so-deep”...

The literature on online product reviews is based on the fundamental premise that reviews impact search costs and also affect consumer confidence in their purchase decisions. However, this premise has not been proven in the literature. To this end we conducted an experiment using an eye-tracking...

Traditionally, information has been assumed to never harm consumers, a notion recently challenged. Salience nudges have been argued to evoke negative emotions, therefore acting as “emotional taxes.” We analyze the emotional and short-term consumer welfare impact of a calorie salience nudge...

Changing dietary habits to reduce the consumption of meat is considered to have great potential to mitigate food-related greenhouse gas (GHG) emissions. To test if nudging can increase the consumption of vegetarian food, I conducted a field experiment with two university restaurants. At the...

This paper utilizes a high frequency dataset on taxi rides in New York City to investigate how emotions due to sporting event outcomes affect passengers' tipping behavior. I formulate and empirically test a reference-dependent preferences framework of tipping behavior. The results indicate that...

Many employers have increased the default contribution rates in their retirement plans, generating higher employee savings. However, a large fraction of employers are reluctant to default employees into savings rates that are high enough to leave those employees adequately prepared for...

In a choice experiment with 1866 Amazon Mechanical Turk workers in the domain of cars, we test some of the predictions of a family of multi-attribute choice models that incorporate a menu-dependent reference point whose value in every attribute is the minimum value of that attribute among the...