This study examines firm behaviour when consumers can costlessly select a default product, or incur a decision cost to find their personal optimum. Monopolists can be efficient in some contexts, because they have an incentive to reduce decision costs in order to increase available surplus. They...

This paper considers an intrapersonal game between a moderate cold self and a hot self with a higher marginal utility of consumption. Indulging in a tempting good -- eating the first chocolate from a bowl, for example -- induces the hot self and makes further consumption more likely. In...

Over time, our actions shape our habits and even our characters. I introduce this psychological trait into a model of economic decisionmaking: how agents allocate resources across time determines how tempting they find present consumption over future consumption. Minor differences between agents...

The complexity of the modern world imposes significant cognitive and material costs on consumers. This paper models decision costs to better describe and understand the effects of behavioural policy, and finds that, similar to traditional economic policy, behavioural policies can create welfare...

This paper considers electoral behavior and institutional capture when voters choose between a populist and non-populist politician. Populist politicians provide voters with a utility boom followed by a subsequent bust, as in Dornbusch and Edwards (The Macroeconomics of Populism in Latin...

Recent outbreaks of measles in many parts of Canada draw attention to the importance of vaccination policy design, especially for children. Most Canadian provinces fail to meet national immunization targets for key diseases, and coverage ratios among children in a few provinces, where data are...

Canada's greying workforce will spell big fiscal trouble for future taxpayers, according to a new C.D. Howe Institute report. In “The Fiscal Implications of Canadians' Working Longer,” authors William Robson, Colin Busby, and Aaron Jacobs find that demographic change is squeezing the budgets...

The Bank of Canada should track inflation using a measure that better accounts for changes in resale housing prices, according to a new C.D. Howe Institute report. In “Improving on the CPI: A Proposal for a Better Inflation Indicator,” authors Finn Poschmann and Aaron Jacobs urge the Bank to...