We analyze households' responses to an unanticipated change in consumption opportunities and evaluate their implications for the nature and formation of preferences. We study the tariff experiment conducted by South Central Bell where local telephone tariffs were introduced for the first time in...

This paper is concerned with the nature of temptation in stochastic choice models. In particular, we study the distinction between the two leading approaches to modeling temptation in the literature (dynamic inconsistency and costly self-control) when preferences are stochastic. We first design...