Price controls are among the most popular economic policies and, at the same time, among the most consistently criticized by economists. When a price cap is set below the market price, demand rises while incentives to supply the product weaken. The expected result is scarcity: a lower price for those who manage to buy, but a smaller chance of finding the good.
If this consequence is widely understood, why do so many people continue to support price controls? Maldonado and Sautua examine whether support reflects only a lack of information or also motivated beliefs: optimistic views that are psychologically appealing because they fit a prior preference for government intervention.
Personally experiencing shortages reduced support for the price cap by 35 percentage points, nearly twice the decline produced by factual information.
A market in the laboratory
The experiment brought together 821 students in 45 sessions conducted in Bogotá. Participants purchased a fictitious product and received payments tied to their decisions. In the free market, every buyer could obtain the product. Under a binding price cap, the price was lower, but only half could buy.
Before learning how the price cap worked, participants chose which regime they preferred. Some then received factual information explaining the shortage. Others experienced the shortage directly by participating in the regulated market. The economic information was equivalent; what changed was how participants learned it.
In addition, one person in each group made a consequential choice that determined which market regime would be implemented. The others stated a hypothetical preference. This second intervention allowed the researchers to test whether responsibility for the outcome disciplined beliefs.
Experience changed more minds than facts
Support for the price cap, before and after
Before After
Factual information −18 pp
Direct experience −35 pp
Information worked, but its effect was limited. Among participants who received a factual explanation, support fell from 80 percent to 62 percent. Among those who experienced shortages, it fell from 76 percent to 41 percent. The contrast suggests that learning through a personal consequence is more powerful than receiving an accurate description of that same consequence.
Yet experience did not eliminate support. Even after facing a decline from 100 percent to 50 percent in their probability of buying, 41 percent still chose the price cap. For the authors, this persistence is difficult to explain through misinformation alone.
When the choice matters
Responsibility for the decision also changed how participants responded to evidence. Among those who were initially optimistic, consequential decision-makers were 18 percentage points more likely to recognize the shortage effect and 17 points less likely to continue supporting the cap.
The interpretation is that favorable beliefs are less costly when someone is simply stating an opinion. When the choice determines what happens and affects the person's own payoff, maintaining an overly optimistic belief becomes harder.
What can we learn?
The results do not imply that information is useless. Both information and experience corrected beliefs and reduced support. But they show that an information campaign may be insufficient when a policy preference is also sustained by identity, moral views, or the desire to believe that intervention works.
The laboratory isolates these mechanisms but cannot reproduce every feature of real political decisions. Fairness concerns, partisan identity, and repeated exposure to policy outcomes could strengthen or weaken the effects observed here. A natural next step is to test whether transparent feedback, policy pilots, or accountability mechanisms produce similar changes outside the laboratory.
From evidence to action
Make costs visible
Public communication should show concretely how a policy affects availability, quality, and access instead of presenting its consequences only in abstract terms.
Test before scaling
Simulations, pilots, and transparent reporting can allow citizens and implementers to observe consequences before an intervention is expanded.
Connect preferences to outcomes
Mechanisms that make responsibility for a choice explicit may generate more careful evaluations than purely hypothetical opinions.
Abstract
Despite broad expert consensus that price controls are economically inefficient, they remain popular. We study this puzzle through the lens of motivated beliefs: Individuals who favor government intervention may derive gratification from believing that price controls increase welfare. In a laboratory market, participants shopped under monetary incentives and chose between a free-market regime and a price-cap regime. We varied whether participants learned about the cap through factual information or direct exposure to its consequences, and whether their regime choice was decisive. We find that both information and exposure reduced support for the price cap, but exposure was substantially more effective. However, many participants continued to support the cap after experiencing shortages. Participants with decisive regime choices were less likely to endorse the price cap after adverse information or exposure. Thus, support for inefficient policies reflects not only misinformation but self-serving beliefs that persist when individuals are not held accountable for policy outcomes.
Maldonado, Stanislao, and Santiago I. Sautua. 2026. “Why do citizens support price controls? The role of motivated beliefs.” BEER Lab Working Paper BEER-WP-2026-01, Tecnológico de Monterrey.
Research team
Stanislao Maldonado and Santiago I. Sautua. Researchers at Tecnológico de Monterrey. The experiment was implemented at the Rosario Experimental and Behavioral Economics Laboratory, with financial support from the Inter-American Development Bank.