Related papers: On the time consistency of collective preferences
We consider a generalization of the recursive utility model by adding a new component that represents utility of investment gains and losses. We also study the utility process in this generalized model with constant elasticity of…
Agents often have individual goals which depend on a group's actions. If agents trust a forecast of collective action and adapt strategically, such prediction can influence outcomes non-trivially, resulting in a form of performative…
We consider a simple sequential allocation procedure for sharing indivisible items between agents in which agents take turns to pick items. Supposing additive utilities and independence between the agents, we show that the expected utility…
Understanding consumption dynamics and its impact on the whole economy and welfare within the present economic crisis is not an easy task. Indeed the level of consumer demand for different goods varies with the prices, consumer incomes and…
We study unit-level expenditure on consumption across multiple countries and multiple years, in order to extract invariant features of consumption distribution. We show that the bulk of it is lognormally distributed, followed by a power law…
Diversification is the typical investment strategy of risk-averse agents. However, non-diversified positions that allocate all resources to a single asset, state of the world or revenue stream are common too. We show that whenever finitely…
Recently, there has been a growing interest in developing inventory control policies which are robust to model misspecification. One approach is to posit that nature selects a worst-case distribution for any stochastic primitives from some…
We consider social welfare functions when the preferences of individual agents and society maximize subjective expected utility in the tradition of Savage. A system of axioms is introduced whose unique solution is the social welfare…
In this paper, we examine both stability and sustainability of a network-based model of natural resource consumption. Stability is studied from a dynamical systems perspective, though we argue that sustainability is a fundamentally…
Preferences of individuals are distributions of elements generated by generalized functions. Models of economic decision-making derived from such distributions are consistent with results of physiological experiments, and explain any…
We study the Merton portfolio management problem within a complete market, non constant time discount rate and general utility framework. The non constant discount rate introduces time inconsistency which can be solved by introducing sub…
Choice consistency with utility maximization, as a key assumption in economics, has been extensively used to evaluate decision quality of individuals and to predict real-world outcomes across different contexts. Here we investigate the…
This paper considers the portfolio management problem of optimal investment, consumption and life insurance. We are concerned with time inconsistency of optimal strategies. Natural assumptions, like different discount rates for consumption…
We revisit a classical question of how individual consumer preferences and incomes shape aggregate behavior. We develop a method that applies to populations with homothetic preferences and reduces the hard problem of aggregation to simply…
Individual choices often depend on the order in which the decisions are made. In this paper, we expose a general theory of measurable systems (an example of which is an individual's preferences) allowing for incompatible (non-commuting)…
Social life clusters into groups held together by ties that also transmit information. When collective problems occur, group members use their ties to discuss what to do and to establish an agreement, to be reached quick enough to prevent…
How should well-being be prioritised in society, and what trade-offs are people willing to make between fairness and personal well-being? We investigate these questions using a stated preference experiment with a nationally representative…
Multinomial choice models are fundamental for empirical modeling of economic choices among discrete alternatives. We analyze identification of binary and multinomial choice models when the choice utilities are nonseparable in observed…
Harsanyi (1955) showed that the only way to aggregate individual preferences into a social preference which satisfies certain desirable properties is ``utilitarianism'', whereby the social utility function is a weighted average of…
We study preferences estimated from finite choice experiments and provide sufficient conditions for convergence to a unique underlying "true" preference. Our conditions are weak, and therefore valid in a wide range of economic environments.…