When preferences are sensitive to context, firms may try to influence purchase decisions by designing the environment of consumption choices. Confirming anecdotal evidence on retailer marketing tricks, we show that competitive retailers exploit context-sensitivity by designing environments that...

When preferences are sensitive to context, firms may try to influence purchase decisions by designing the environment of consumption choices. Confirming anecdotal evidence on retailer marketing tricks, we show that competitive retailers exploit context-sensitivity by designing environments that...

Generally, Democrats do not increase military spending, and Republicans do not raise welfare payments. Mostly, ruling politicians stick to the manifesto of their party. The current paper provides a theoretical explanation for this phenomenon that does not assume politicians or voters to be...

This note reconsiders communication between an informed expert and an uninformed decision maker with a strategic mediator in a discrete Crawford and Sobel (1982) setting. We show that a strategic mediator may improve communication even when he is biased into the same direction as the expert. The...

We develop a dynamic model of political competition. Each party has a policymotivated ideological wing and an office-motivated opportunistic wing. A blockade arises if inner-party conflict stops policy implementation. We use this model to study whether early elections should be used to overcome...

Mobility of high-income individuals across borders puts pressure on governments to lower taxes. A central tenet of the corresponding textbook argument is that mobile individuals react to tax differentials through migration, and in turn immobile individuals vote for lower taxes. We investigate to...

We study private communication in social networks prior to a majority vote on two alternative policies. Some (or all) agents receive a private imperfect signal about which policy is correct. They can, but need not, recommend a policy to their neighbors in the social network prior to the vote. We...

We develop a model to analyze the determinants and effects of an endogenous imperfect transferability of human capital on natives and immigrants. The model reveals that high migration flows and high skill-transferability are mutually interdependent. Moreover, we show that high mobility within a...