Related papers: Preferences Yielding the "Precautionary Effect"
To determine the welfare implications of price changes in demand data, we introduce a revealed preference relation over prices. We show that the absence of cycles in this relation characterizes a consumer who trades off the utility of…
Affordances, a foundational concept in human-computer interaction and design, have traditionally been explained by direct-perception theories, which assume that individuals perceive action possibilities directly from the environment.…
We introduce and study the problem of detecting whether an agent is updating their prior beliefs given new evidence in an optimal way that is Bayesian, or whether they are biased towards their own prior. In our model, biased agents form…
We present a new experiment demonstrating destructive interference in customers' estimates of conditional probabilities of product failure. We take the perspective of a manufacturer of consumer products, and consider two situations of cause…
Effect modification occurs when the effect of the treatment on an outcome varies according to the level of other covariates and often has important implications in decision making. When there are tens or hundreds of covariates, it becomes…
We consider sequential search by an agent who cannot observe the quality of goods but can acquire information by buying signals from a profit-maximizing principal with limited commitment power. The principal can charge higher prices for…
When a new product or technology is introduced, potential consumers can learn its quality by trying the product, at a risk, or by letting others try it and free-riding on the information that they generate. We propose a dynamic game to…
Given noisy data, function estimation is considered when the unknown function is known apriori to consist of a small number of regions where the function is either convex or concave. When the regions are known apriori, the estimate is…
Determining consumer preferences and utility is a foundational challenge in economics. They are central in determining consumer behaviour through the utility-maximising consumer decision-making process. However, preferences and utilities…
In this article, we propose to use the formalism of quantum mechanics to describe and explain the so-called "abnormal" behaviour of agents in certain decision or choice contexts. The basic idea is to postulate that the preferences of these…
Here we focus on the description of the mechanisms behind the process of information aggregation and decision making, a basic step to understand emergent phenomena in society, such as trends, information spreading or the wisdom of crowds.…
A group of experts, for instance climate scientists, is to choose among two policies $f$ and $g$. Consider the following decision rule. If all experts agree that the expected utility of $f$ is higher than the expected utility of $g$, the…
When information acquisition is costly but flexible, a principal may rationally acquire information that favors one group over another. The former group faces incentives to invest in becoming productive, while the latter is discouraged from…
This paper provides a behavioral analysis of conservatism in beliefs. I introduce a new axiom, Dynamic Conservatism, that relaxes Dynamic Consistency when information and prior beliefs "conflict." When the agent is a subjective expected…
In consumer theory, ranking available objects by means of preference relations yields the most common description of individual choices. However, preference-based models assume that individuals: (1) give their preferences only between pairs…
The outcomes of elections, product sales, and the structure of social connections are all determined by the choices individuals make when presented with a set of options, so understanding the factors that contribute to choice is crucial. Of…
An important use of machine learning is to learn what people value. What posts or photos should a user be shown? Which jobs or activities would a person find rewarding? In each case, observations of people's past choices can inform our…
This paper studies preference aggregation under risk. In our model, each agent has an incomplete preference relation represented by a set of expected utility functions. The classical Pareto principle is silent on agreement involving…
Causal inference in observational studies is notoriously difficult, due to the fact that the experimenter is not in charge of the treatment assignment mechanism. Many potential con- founding factors (PCFs) exist in such a scenario, and if…
Most of the stochastic orders for comparing random variables, considered in the literature, are afflicted with two main drawbacks: (i) lack of connex property and (ii) lack of consideration of any dependence structure between the random…