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...

In June 2020, we surveyed 2,516 Americans regarding their preferences for both short- and long-term expansions to government-provided healthcare and unemployment insurance programs. We find that support for such programs is positively associated with (a) COVID-19 deaths and infections in the...

Behavioral economists have proposed that loss-averse employees increase productivity when bonuses are "loss framed"--prepaid then clawed back if targets are unmet. We theoretically document that loss framing raises incentives for costly risk mitigation and for inefficient multitasking,...

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...

In 2005, the U.S. Congress legislated that the H-1B visa program create 20,000 annual slots reserved for advanced-degree applicants. Since then, the U.S. Customs and Immigration Service (USCIS) has used visa allocation rules that comply with this legislation. Following a directive in the April...

Taxes change behavior. But how does this change arise? In traditional economic models, change is achieved through the price channel: assuming all else is held constant, taxes increase prices and thus decrease demand. However, the assumption that all else is held constant may be violated in the...

Affirmative action policies are often implemented through reserve systems. We contend that the functioning of these systems is counterintuitive, and that the consequent misunderstanding leads individuals to support policies that ineffectively pursue their goals. We present 1,013 participants in...

We use standardized end-of-course knowledge assessments to examine student learning during the disruptions induced by the COVID-19 pandemic. Examining seven economics courses taught at four US R1 institutions, we find that students performed substantially worse, on average, in Spring 2020 when...

We present a general approach to experimentally testing candidate reference points. This approach builds from Prospect Theory's prediction that an increase in payoffs is perfectly offset by an equivalent increase in the reference point. Violation of this prediction can be tested with...

The rational-choice framework for modeling matching markets has been tremendously useful in guiding the design of school-assignment systems. Despite this success, a large body of work documents deviations from the predictions of this framework that appear influenced by behavioral-economic...