Related papers: Nontransitive Preferences and Stochastic Rationali…
We generalize the stochastic revealed preference methodology of McFadden and Richter (1990) for finite choice sets to settings with limited consideration. Our approach is nonparametric and requires partial choice set variation. We impose a…
Preferences often change -- even in short time intervals -- due to either the mere passage of time (present-biased preferences) or changes in environmental conditions (state-dependent preferences). On the basis of the empirical findings in…
The transient fluctuation of the prosperity of firms in a network economy is investigated with an abstract stochastic model. The model describes the profit which firms make when they sell materials to a firm which produces a product and the…
Non-typical transport phenomena may arise when randomly driven particles remain in an active relationship with the environment instead of being passive. If we attribute to Brownian particles an ability to induce alterations of the…
There is a persistent confusion about determinism and predictability. In spite of the opinions of some eminent philosophers (e.g., Popper), it is possible to understand that the two concepts are completely unrelated. In few words we can say…
To study the assumption that the utility maximization hypothesis implicitly adds to consumer theory, we consider a mathematical representation of pre-marginal revolution consumer theory based on subjective exchange ratios. We introduce two…
Consider the object allocation (one-sided matching) model of Shapley and Scarf (1974). When final allocations are observed but agents' preferences are unknown, when might the allocation be in the core? This is a one-sided analogue of the…
Preferences, fundamental in all forms of strategic behavior and collective decision-making, in their raw form, are an abstract ordering on a set of alternatives. Agents, we assume, revise their preferences as they gain more information…
Qualitative and quantitative approaches to reasoning about uncertainty can lead to different logical systems for formalizing such reasoning, even when the language for expressing uncertainty is the same. In the case of reasoning about…
The statistical properties of pairwise majority voting over S alternatives is analyzed in an infinite random population. We first compute the probability that the majority is transitive (i.e. that if it prefers A to B to C, then it prefers…
An important use of machine learning is to learn what people value. What posts or photos should a user be shown? Which jobs or activities would a person find rewarding? In each case, observations of people's past choices can inform our…
The Slutsky equation, central in consumer choice theory, is derived from the usual hypotheses underlying most standard models in Economics, such as full rationality, homogeneity, and absence of interactions. We present a statistical physics…
I study robust comparative statics for risk-averse subjective expected utility (SEU) maximizers. Starting with a finite menu of actions totally ordered by sensitivity to risk, I identify the transformations of her menu that lead a…
Behavioural economics provides labels for patterns in human economic behaviour. Probability weighting is one such label. It expresses a mismatch between probabilities used in a formal model of a decision (i.e. model parameters) and…
In consumer theory, ranking available objects by means of preference relations yields the most common description of individual choices. However, preference-based models assume that individuals: (1) give their preferences only between pairs…
We describe a quantum model of simple choice game (constructed upon entangled state of two qubits), which involves the fundamental problem of transitive - intransitive preferences. We compare attainability of optimal intransitive strategies…
In this paper an interesting application of mathematics in economics is presented: the formulation of the theory of consumer basic problem, grounded on the concept of preferences relation and operationalized with optimization tools.
The central question of this paper is: are deterministic and indeterministic descriptions observationally equivalent in the sense that they give the same predictions? I tackle this question for measure-theoretic deterministic systems and…
The scientific question resolved by this paper is that the continuity equation appears as an equivalent language of the system of first-order linear ODE. The main result characterizes the fact that the continuity equation contains…
We show that many bounded rationality patterns of choice can be alternatively represented as testable models of limited consideration, and we elicit the features of the associated unobserved consideration sets from the observed choice.…