Related papers: Optimism, overconfidence, and moral hazard

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…

Humans and animals have the ability to reason and make predictions about different courses of action at many time scales. In reinforcement learning, option models (Sutton, Precup \& Singh, 1999; Precup, 2000) provide the framework for this…

Understanding the affective, cognitive and behavioural processes involved in risk taking is essential for treatment and for setting environmental conditions to limit damage. Using Temporal Difference Reinforcement Learning (TDRL) we…

Mathematical models are increasing adopted for setting targets for disease prevention and control. As model-informed policies are implemented, however, the inaccuracies of some forecasts become apparent, for example overprediction of…

Lehmann's ideas on concepts of dependence have had a profound effect on mathematical theory of reliability. The aim of this paper is two-fold. The first is to show how the notion of a ``hazard potential'' can provide an explanation for the…

In this paper, we take up the analysis of a principal/agent model with moral hazard introduced in [17], with optimal contracting between competitive investors and an impatient bank monitoring a pool of long-term loans subject to Markovian…

We present an extensive study of the joint effects of heterogeneous social agents and their heterogeneous social links in a bounded confidence opinion dynamics model. The full phase diagram of the model is explored for two different…

That science and other domains are now largely data-driven means virtually unlimited opportunities for statisticians. With great power comes responsibility, so it's imperative that statisticians ensure that the methods being developing to…

Motivated by the growing requirements on the operation of complex engineering systems, we present contracts as specifications for continuous-time linear dynamical systems with inputs and outputs. A contract is defined as a pair of…

Regression plays a key role in many research areas and its variable selection is a classic and major problem. This study emphasizes cost of predictors to be purchased for future use, when we select a subset of them. Its economic aspect is…

In statistical exercises where there are several candidate models, the traditional approach is to select one model using some data driven criterion and use that model for estimation, testing and other purposes, ignoring the variability of…

This work suggests modifications to a previously introduced class of heterogeneous agent models that allow for the inclusion of different types of agent motivations and behaviours in a unified way. The agents operate within a highly…

AI and ML models have already found many applications in critical domains, such as healthcare and criminal justice. However, fully automating such high-stakes applications can raise ethical or fairness concerns. Instead, in such cases,…

To choose between two discrete goods, a consumer pays attention to only those with prices below a threshold. From these, she chooses her most preferred good. We assume consumers in a population have the same preference but may have…

Public-Private Partnership (PPP) is a contract between a public entity and a consortium, in which the public outsources the construction and the maintenance of an equipment (hospital, university, prison...). One drawback of this contract is…

The moral foundations theory supports that people, across cultures, tend to consider a small number of dimensions when classifying issues on a moral basis. The data also show that the statistics of weights attributed to each moral dimension…

We explore how large language models (LLMs) can be influenced by prompting them to alter their initial decisions and align them with established ethical frameworks. Our study is based on two experiments designed to assess the susceptibility…

We introduce a model-free preference under ambiguity, as a primitive trait of behavior, which we apply once as well as repeatedly. Its single and double application yield simple, easily interpretable definitions of ambiguity aversion and…

Experiments on decision making under uncertainty are known to display a classical pattern of risk aversion and risk seeking referred to as "fourfold pattern" (or "reflection effect") , but recent experiments varying the speed and order of…

All people have to make risky decisions in everyday life. And we do not know how true they are. But is it possible to mathematically assess the correctness of our choice? This article discusses the model of decision making under risk on the…