Working Paper: CEPR ID: DP12988
Authors: Paul Heidhues; Botond Kszegi
Abstract: This discussion paper is a preliminary version of a survey written for the Handbook of Behavioral Economics.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Consumer naivete (D18) | Firms exploit consumer naivete (D43) |
| Firms exploit consumer naivete (D43) | Charge hidden prices (D49) |
| Charge hidden prices (D49) | Higher prices (D49) |
| Charge hidden prices (D49) | Reduced welfare for consumers (D69) |
| Consumer naivete (D18) | Higher prices (D49) |
| Consumer naivete (D18) | Reduced welfare for consumers (D69) |
| Competition mitigates effects of consumer naivete (L13) | Firms lower anticipated prices (L11) |
| Monopolistic settings (D42) | Higher total prices for naive consumers (D41) |
| Consumer sophistication (D18) | Distribution of welfare between firms and consumers (D39) |
| Naive consumers (D18) | Cross-subsidizing sophisticated consumers (D16) |