Research

Research Interests

Behavioural and Experimental Economics; Public Economics; Decision Theory; Economic Theory; Public Policy


Publications

Chesterley, Nicholas. Forthcoming. "Populism and Institutional Capture." European Journal of Political Economy.

Chesterley, Nicholas. 2017. “Defaults, Decision Costs and Welfare in Behavioural Policy Design.” Economica. 84(333).

Chesterley, Nicholas. 2015. "Virtue and Vice with Endogenous Preferences." Economic Theory Bulletin. 4(2). 199-211.

Busby, Colin and Nicholas Chesterley. 2015. “A Shot in the Arm: How Small Changes Can Improve Vaccination Policy.” Commentary 421. Toronto: C.D. Howe Institute.

Brydon, Robbie, Chesterley, Nicholas, Dachis, Benjamin, and Aaron Jacobs. 2014. “Measuring Innovation in Canada: The Tale Told by Patent Applications.” E-Brief 191. Toronto: C.D. Howe Institute.

Dachis, Ben, Robson,William B.P., and Nicholas Chesterley. 2014. “Tools for Workers.” E-Brief 179.Toronto: C.D. Howe Institute.


Working Papers

Bet You Can't Eat Just One: Hot and Cold Selves and 'Self'-Control

Abstract: This paper considers an intrapersonal game between a moderate cold self and a hot self with a higher marginal utility of consumption. Indulging in a tempting good – eating the first chocolate from a bowl, for example – induces the hot self and makes further consumption more likely. In equilibrium, sophisticated selves best respond to each other’s behaviour by adopting personal rules to avoid inducing the other self: the cold self over-abstains and the hot self over-indulges, explaining cycles of abstinence and binging such as ‘falls off the wagon’ that are sometimes observed as well as the strictness of some consumers’ diets or personal rules. Multiple equilibria may exist, making expectations about the behaviour of the other self important. A brief lab experiment tests the prediction that indulgence increases the appeal of further consumption, finding that consumers on a diet who eat a piece of chocolate before the experiment consume more during it.

"Decision Costs, Defaults, and Market Structure"

Abstract: This note examines firm behaviour when consumers can costlessly select a default product, or incur a decision cost to find their personal optimum. Monopolists can be efficient in some contexts, because they have an incentive to reduce decision costs in order to increase available surplus. They may also be unable to extract all surplus from consumers because they must leave some in order to convince consumers to optimize. Competitive firms, in contrast, may use decision costs as switching costs, and have an incentive to increase the complexity of consumer decisions.

Chesterley, Nicholas and Andrew Leicester. 2011. “Aviation Policy”. London: Institute for Fiscal Studies.

Abstract: We summarize recent evidence on the relationship between aviation prices and demand. Overall elasticities appear to be around -1.0 or slightly smaller in absolute terms, though there is considerable variation in the precise estimate across studies. Elasticities vary along a number of dimensions in fairly regular ways. Demand is more price-elastic in the long-run than the short-run, and for leisure flights than business flights. Controlling for purpose, short-haul demand also seems to be more price-elastic than long-haul demand. To consider equity issues, we draw on UK household-level data to estimate the distributional impact of the current major tax on aviation, Air Passenger Duty. We suggest that the tax has become less progressive over time reflecting a combination of changes in the structure of the tax and changes in the relative demand for aviation. APD now appears to affect those in the middle of the distribution more heavily than those at the top or bottom. This casts doubt on the usual assumption that aviation taxes are straightforwardly progressive.