This chapter surveys the literature on behavioral industrial organization, covering four broad
topics:(1) how rational firms interact with consumers who make systematic mistakes in …

We initiate the study of naïveté-based discrimination, the practice of conditioning offers on
external information about consumers' naïveté. Knowing that a consumer is naive increases …

Inattention is a central, unifying theme for much of behavioral economics. It permeates such
disparate fields as microeconomics, macroeconomics, finance, public economics, and …

This article defines and analyzes a “sparse max” operator, which is a less than fully attentive
and rational version of the traditional max operator. The agent builds (as economists do) a …

Conventional economic theory assumes that consumers are fully rational, that they have
well-defined preferences and easily understand the market environment. Yet, in fact …

We estimate the effect of information and expertise on consumers' willingness to pay for
national brands in physically homogeneous product categories. In a detailed case study of …

We present a model of market competition in which consumers' attention is drawn to the
products' most salient attributes. Firms compete for consumer attention via their choices of …

We analyse conditions facilitating profitable deception in a simple model of a competitive
retail market. Firms selling homogenous products set anticipated prices that consumers …

This paper proposes a model in which identical sellers of a homogeneous product compete
in both prices and price frames (ie, ways to present price information). Frame choices affect …

Both the “law of one price” and Bertrand's (J Savants 67: 499–508, 1883) prediction of
marginal cost pricing for homogeneous goods rest on the assumption that consumers will …