Related papers: Rational hyperbolic discounting
Situations where people have to decide between hurting themselves or another person are at the core of many individual and global conflicts. Yet little is known about how people behave when facing these situations in the lab. Here we report…
In mechanism design it is typical to impose incentive compatibility and then derive an optimal mechanism subject to this constraint. By replacing the incentive compatibility requirement with the goal of minimizing expected ex post regret,…
We consider three equilibrium concepts proposed in the literature for time-inconsistent stopping problems, including mild equilibria, weak equilibria and strong equilibria. The discount function is assumed to be log sub-additive and the…
In the setting of sequential prediction of individual $\{0, 1\}$-sequences with expert advice, we show that by allowing the learner to abstain from the prediction by paying a cost marginally smaller than $\frac 12$ (say, $0.49$), it is…
This study proposes two novel learning rate schedulers -- Hyperbolic Learning Rate Scheduler (HyperbolicLR) and Exponential Hyperbolic Learning Rate Scheduler (ExpHyperbolicLR) -- to address the epoch sensitivity problem that often causes…
This paper studies a dynamic screening model in which a principal hires an agent with limited liability. The agent's private cost of working is an i.i.d. draw from a continuous distribution. His working status is publicly observable. The…
A monopolist wants to sell one item per period to a consumer with evolving and persistent private information. The seller sets a price each period depending on the history so far, but cannot commit to future prices. We show that, regardless…
Conditions for the validity of the quantum adiabatic approximation are analyzed. For the case of linear Hamiltonians, a simple and general sufficient condition is derived, which is valid for arbitrary spectra and any kind of time variation.…
A monopolist offers personalized prices to consumers with unit demand, heterogeneous values, and idiosyncratic costs, who differ in a protected characteristic, such as race or gender. The seller is subject to a non-discrimination…
A well-intentioned principal provides information to a rationally inattentive agent without internalizing the agent's cost of processing information. Whatever information the principal makes available, the agent may choose to ignore some.…
This paper studies the equilibrium price of an asset that is traded in continuous time between N agents who have heterogeneous beliefs about the state process underlying the asset's payoff. We propose a tractable model where agents maximize…
When allocating indivisible resources or tasks, an envy-free allocation or equitable allocation may not exist. We present a sufficient condition and an algorithm to achieve envy-freeness and equitability when monetary transfers are allowed.…
Auction is applied for trade with various mechanisms. A simple but practical question is which mechanism, typically first-price or second-price auctions, is preferred from the perspective of bidders or sellers. A celebrated answer is…
People often reject offers that are too generous due to the perception of hidden drawbacks referred to as "phantom costs." We hypothesized that this perception and the decision-making vary based on the type of agent making the offer (human…
Empirical research often cites observed choice responses to variation that shifts expected discounted future utilities, but not current utilities, as an intuitive source of information on time preferences. We study the identification of…
In this paper, we study belief elicitation about an uncertain future event, where the reports will affect a principal's decision. We study two problems that can arise in this setting: (1) Agents may have an interest in the outcome of the…
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…
We investigate a value-maximizing problem incorporating a human behavior pattern: present-biased-ness, for a firm which navigates strategic decisions encompassing earning retention/payout and capital injection policies, within the framework…
We consider the fair division of indivisible items among $n$ agents with additive non-negative normalized valuations, with the goal of obtaining high value guarantees, that is, close to the proportional share for each agent. We prove that…
In the problem of asymptotic binary i.i.d. state discrimination, the optimal asymptotics of the type I and the type II error probabilities is in general an exponential decrease to zero as a function of the number of samples; the set of…