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Bayesian consumers infer that hidden add-on prices (e.g., the cost of ink for a printer) are likely to be high prices. If consumers are Bayesian, firms will not shroud information in equilibrium. However, shrouding may occur in an economy with some myopic (or unaware) consumers. Such shrouding creates an inefficiency, which firms may have an incentive to(More)
This paper analyzes six spectrum auctions conducted by the Federal Communications Commission (FCC) from July 1994 to May 1996. These auctions were simultaneous multipleround auctions in which collections of licenses were auctioned simultaneously. This auction form proved remarkably successful. Similar items sold for similar prices and bidders successfully(More)
INTRODUCTION ..................................................................................................................................................2 I. THEORY.............................................................................................................................................................4 A. Set-Asides Can Enhance(More)
This article analyzes how legal presumptions can mediate between costly litigation and ex ante incentives. We augment a moral hazard model with a redistributional litigation game in which a presumption parameterizes how a court ‘‘weighs’’ evidence offered by the opposing sides. Strong prodefendant presumptions foreclose lawsuits altogether, but also(More)
By providing feedback to customers on home electricity and natural gas usage with a focus on peer comparisons, utilities can reduce energy consumption at a low cost. We analyze data from two large-scale, random-assignment field experiments conducted by utility companies providing electricity (the Sacramento Municipal Utility District (SMUD)) and electricity(More)
Randomized natural experiments provide social scientists with rare opportunities to draw credible causal inferences in real-world settings. We capitalize on such a unique experiment to examine how the name order of candidates on ballots affects election outcomes. Since 1975, California has randomized the ballot order for statewide offices with a complex(More)
This paper offers an economic analysis of color-blind alternatives to conventional affirmative action policies in higher education, focusing on efficiency issues. When the distribution of applicants’ traits is fixed (i.e., in the short run) color-blindness leads colleges to shift weight from academic traits that predict performance to social traits that(More)
This Essay explores an alternative to one of the pillars of contract law, that obligations arise only when there is “mutual assent”—when the parties reach consensus over the terms of the transaction. It explores a principle of “no-retraction,” under which each party is obligated to terms it manifested and can retract only with some liability. In contrast to(More)
Behavioral Law and Economics has created a dilemma for policymakers. On the one hand, research from the field suggests a wide range of unconventional policy instruments (“nudges”) may be used to shape people’s voluntary choices in order to lead them to the option they most prefer. On the other hand, the very nature of these new instruments precludes(More)