Tax aversion makes it politically challenging to introduce Pigouvian taxes. One proposed solution to overcome this resistance is to package policies. Using an online lab experiment, we investigate whether combining a tax and a subsidy is perceived as more acceptable than the tax or the subsidy...

Biased beliefs affect real-world decisions, including political solutions to societal challenges. One crucial example is environmental policy: people tend to underestimate the incentive effect of Pigouvian policies. Addressing biased beliefs at scale is then paramount. In the days leading up to...