When a policymaker introduces a novel policy, she will not know what the citizens' choices will be under the policy. In the face of novel policies, citizens themselves may have to construct new choice sets. Such choice construction imparts inherent ambiguity to novel policy implementation: the...

Evidence in the applied literature indicates that policies intended to stimulate positive externalities via coercion can backfire. For example, Davis (2008) finds that when in 1989, the government of Mexico City tried to control air pollution by banning most drivers from driving their vehicle...