Paul Heidhues looks into new models of consumer behavior and their implications for markets. He is also interested in the question how people with self-serving biases – or “wrong” views of the world – react to new evidence. This video was made during his research visit at briq in the summer of 2017.
Three questions with Paul Heidhues
Paul worked on numerous topics in Industrial Organization and Competition Policy such as input-market bargaining power, merger control, and collusion. More recently, much of his work focuses on the functioning of markets when consumers are partly driven by psychological factors – such as social preferences, loss aversion, time-inconsistency, or naivete – that the classic consumer model abstracts from. Among other things, he has written on how firms optimally price products and design credit contracts in response to consumers' psychological tendencies, and he has investigated the implications of various consumer mistakes for the functioning of markets and for consumer-protection regulation.
Paul is a member of the Academic Panel of the Competition and Markets Authority of the UK, a member of the Arbeitskreis Kartellrecht of the German Antitrust Authority (Bundeskartellamt), a Research Fellow of the CEPR Programme in Industrial Organization, a Research Fellow of the CESifo Network in Behavioral Economics, and an elected member of the Industrieökonomischer Ausschuss as well as the Theoretischer Ausschuss of the Verein für Socialpolitik. His work appeared in leading academic journals such as the American Economic Review, the Quarterly Journal of Economics, and the Review of Economic Studies.