Related papers: Time discounting under uncertainty
In this paper we propose to use elements of the mathematical formalism of Quantum Mechanics to capture the idea that agents' preferences, in addition to being typically uncertain, can also be indeterminate. They are determined (i.e.,…
Relative temporal-difference (TD) learning was introduced to mitigate the slow convergence of TD methods when the discount factor approaches one by subtracting a baseline from the temporal-difference update. While this idea has been studied…
In this work we consider the unbiased estimation of expectations w.r.t.~probability measures that have non-negative Lebesgue density, and which are known point-wise up-to a normalizing constant. We focus upon developing an unbiased method…
This paper studies how violations of structural assumptions like expected utility and exponential discounting can be connected to basic rationality violations, even though these assumptions are typically regarded as independent building…
This paper reveals a trap for artificial general intelligence (AGI) theorists who use economists' standard method of discounting. This trap is implicitly and falsely assuming that a rational AGI would have time-consistent preferences. An…
Adaptive dynamical systems arise in a multitude of contexts, e.g., optimization, control, communications, signal processing, and machine learning. A precise characterization of their fundamental limitations is therefore of paramount…
We examine behavioral axioms in decision theory that are satisfied approximately rather than exactly. We demonstrate that in key domains -- decisions under risk, uncertainty, and intertemporal choice -- behavior that \emph{almost} satisfies…
Economists often estimate economic models on data and use the point estimates as a stand-in for the truth when studying the model's implications for optimal decision-making. This practice ignores model ambiguity, exposes the decision…
The random utility model, a cornerstone in economics, is axiomatized by Falmagne (1978) and McFadden and Richter (1990) with the assumption that if a menu is observable, the choice frequencies of all alternatives are also observable.…
We study the testable implications of models of dynamically inconsistent choices when planned choices are unobservable, and thus only "on path" data is available. First, we discuss the approach in Blow, Browning and Crawford (2021), who…
The valuation process that economic agents undergo for investments with uncertain payoff typically depends on their statistical views on possible future outcomes, their attitudes toward risk, and, of course, the payoff structure itself.…
We study delay-independent stability in nonlinear models with a distributed delay which have a positive equilibrium. Such models frequently occur in population dynamics and other applications. In particular, we construct a relevant…
This study examines the economic impact of post-hoc uncertainty discounting in predictive energy management, specifically in battery energy arbitrage. A 2.2 MWh, 1.1 MW Tesla battery, emulating operations at the University of Queensland's…
We establish explicit socially optimal rules for an irreversible investment deci- sion with time-to-build and uncertainty. Assuming a price sensitive demand function with a random intercept, we provide comparative statics and economic…
We study the metastability properties of a simple prototypical bistable system using the formalism of the Koopman operator. Instead of studying noise-induced transitions by following the trajectories of the system, we track them by studying…
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…
We study a multi-objective model on the allocation of reusable resources under model uncertainty. Heterogeneous customers arrive sequentially according to a latent stochastic process, request for certain amounts of resources, and occupy…
Estimation and counterfactual analysis in dynamic structural models rely on assumptions about the dynamic process of latent variables, which may be misspecified. We propose a framework to quantify the sensitivity of scalar parameters of…
In a continuous time stochastic economy, this paper considers the problem of consumption and investment in a financial market in which the representative investor exhibits a change in the discount rate. The investment opportunities are a…
We begin by formulating and characterizing a dominance criterion for prize sequences: $x$ dominates $y$ if any impatient agent prefers $x$ to $y$. With this in hand, we define a notion of comparative patience. Alice is more patient than Bob…