Related papers: Consumer Welfare Under Individual Heterogeneity

I provide a model of rational inattention with heterogeneity and prove it is observationally equivalent to a state-dependent stochastic choice model subject to attention costs. I demonstrate that additive separability of unobservable…

Motivated by applications such as college admission and insurance rate determination, we propose an evaluation problem where the inputs are controlled by strategic individuals who can modify their features at a cost. A learner can only…

We consider the problem of posting prices for unit-demand buyers if all $n$ buyers have identically distributed valuations drawn from a distribution with monotone hazard rate. We show that even with multiple items asymptotically optimal…

Many policies allocate harms or benefits that are uncertain in nature: they produce distributions over the population in which individuals have different probabilities of incurring harm or benefit. Comparing different policies thus involves…

In the context of nonlinear prices, the empirical evidence suggests that the consumers have cognitive biases represented in a limited understanding of nonlinear price structures, and they respond to some alternative perceptions of the…

Personalized pricing analytics is becoming an essential tool in retailing. Upon observing the personalized information of each arriving customer, the firm needs to set a price accordingly based on the covariates such as income, education…

We study how nonlinear, state-dependent health dynamics shape economic behavior, inequality, and the evaluation of disability insurance at older ages. Using English panel data, we construct a continuous health index and estimate its…

This study utilizes an ensemble of feedforward neural network models to analyze large-volume and high-dimensional consumer touchpoints and their impact on purchase decisions. When applied to a proprietary dataset of consumer touchpoints and…

Session-based recommendation aims to predict items that an anonymous user would like to purchase based on her short behavior sequence. The current approaches towards session-based recommendation only focus on modeling users' interest…

We present a recommender system based on the Random Utility Model. Online shoppers are modeled as rational decision makers with limited information, and the recommendation task is formulated as the problem of optimally enriching the…

Many policy counterfactuals depend on how consumers value product attributes such as sugar, sodium, caffeine, alcohol, or emissions. Standard hedonic and differentiated-products models interpret these valuations statically. That…

We propose a new method for studying environments with unobserved individual heterogeneity. Based on model-implied pairwise inequalities, the method classifies individuals in the sample into groups defined by discrete unobserved…

Consumption practices are determined by a combination of economic, social, and cultural forces. We posit that lower economic constraints leave more room to diversify consumption along cultural and social aspects in the form of omnivorous or…

Many marketing applications, including credit card incentive programs, offer rewards to customers who exceed specific spending thresholds to encourage increased consumption. Quantifying the causal effect of these thresholds on customers is…

Existing research on the static effects of the manipulation of welfare program benefit parameters on labor supply has allowed only restrictive forms of heterogeneity in preferences. Yet preference heterogeneity implies that the marginal…

Walrasian prices, if they exist, have the property that one can assign every buyer some bundle in her demand set, such that the resulting assignment will maximize social welfare. Unfortunately, this assumes carefully breaking ties amongst…

We consider a model of socially interacting individuals that make a binary choice in a context of positive additive endogenous externalities. It encompasses as particular cases several models from the sociology and economics literature. We…

Accurate prediction of user consumption is a key part not only in understanding consumer flexibility and behavior patterns, but in the design of robust and efficient energy saving programs as well. Existing prediction methods usually have…

We study the power of item-pricing as a tool for approximately optimizing social welfare in a combinatorial market. We consider markets with $m$ indivisible items and $n$ buyers. The goal is to set prices to the items so that, when agents…

In consumer search, there is a set of items. An agent has a prior over her value for each item and can pay a cost to learn the instantiation of her value. After exploring a subset of items, the agent chooses one and obtains a payoff equal…