This paper shows that accounting for variation in mistakes can be crucial for welfare analysis. Focusing on consumer underreaction to not-fully-salient sales taxes, we show theoretically that the efficiency costs of taxation are amplified by differences in underreaction across individuals and...

A growing body of evidence suggests that decision-makers fail to account for correlation in signals that they receive. We study the relevance of this mistake in students' interactions with school-choice matching mechanisms. In a lab experiment presenting simple and incentivized school-choice...

This paper shows that accounting for variation in mistakes can be crucial for welfare analysis. Focusing on consumer underreaction to not-fully-salient sales taxes, we show theoretically that the efficiency costs of taxation are amplified by differences in underreaction across individuals and...

A growing body of evidence suggests that decision-makers fail to account for correlation in signals that they receive. We study the relevance of this mistake in students' interactions with school- choice matching mechanisms. In a lab experiment presenting simple and incentivized school-choice...

We present results from experiments containing incentivized school-choice scenarios. In these scenarios, we vary whether schools’ assessments of students are based on a common priority (inducing correlation in admissions decisions) or are based on independent assessments (eliminating...