Related papers: Motives for Delegating Financial Decisions
This paper presents a new rationale for a self-interested economic elite voluntarily extending property rights. When agents make endogenous investment decisions, there is a commitment problem. Ex-post, the elite face strong incentives to…
AI systems are fallible, and humans can make mistakes in deciding whether to trust AI over their own judgment. Thus, improving human-AI collaboration requires understanding when, why, and how humans decide to rely on AI. We study two…
When a decision, such as the approval or denial of a bank loan, is delegated to a computer, an explanation of that decision ought to be given with it. This ethical need to explain the decisions leads to the search for a formal definition of…
We propose a novel explanation for classic international macro puzzles regarding capital flows and portfolio investment, which builds on modern macro-finance models of experience-based belief formation. Individual experiences of past…
Budgetary constraints force organizations to pursue only a subset of possible innovation projects. Identifying which subset is most promising is an error-prone exercise, and involving multiple decision makers may be prudent. This raises the…
We elicit incomplete preferences over monetary gambles with subjective uncertainty. Subjects rank gambles, and these rankings are used to estimate preferences; payments are based on estimated preferences. About 40\% of subjects express…
An expert tells an advisee whether to take an action that may be good or bad. He may provide a condition under which to take the action. This condition predicts whether the action is good if and only if the expert is competent. Providing…
Representative investors whose behaviour is modelled by a deterministic finite automaton generate complexity both in the time series of each asset and in the cross-sectional correlation when the rule governing their behaviour is…
We investigate investors voluntary disclosure decisions under uncertainty about their information endowment (Dye 1985). In our model, an investor may receive initial evidence about a target firm. Conditional on learning the initial…
Elites disproportionately influence policymaking, yet little is known about their fairness and efficiency preferences -- key determinants of support for redistributive policies. We investigate these preferences in an incentivized lab…
In an earlier experiment, participants played a perfect information game against a computer, which was programmed to deviate often from its backward induction strategy right at the beginning of the game. Participants knew that in each game,…
Opportunities, such as access to education or family background, shape income inequality by influencing the chances of economic success. Unequal opportunities create uncertainty about whether success is merit- or luck-based. We examine how…
In this paper, we present results from a human-subject study designed to explore two facets of human mental models of robots---inferred capability and intention---and their relationship to overall trust and eventual decisions. In…
A cooperative player invests effort into a common venture without knowing the partner's intention in advance. But this strategy can be implemented in various ways when a player is involved in different games simultaneously. Interestingly,…
Dramatic growth of investment disputes between foreign investors and host states rises serious questions about the impact of those disputes on investors. This paper is the first to explain increased uncertainty of investors about the…
LLMs are increasingly used to make or support high-stakes decisions under uncertainty, where alignment depends not only on factual accuracy but on how models weigh tradeoffs between different outcomes. We present an empirical pipeline for…
We develop and apply epistemic tests to various decentralized governance methods as well as to study the impact of participation. These tests probe the ability to reach a correct outcome when there is one. We find that partial abstention is…
Investors commonly exhibit the disposition effect - the irrational tendency to sell their winning investments and hold onto their losing ones. While this phenomenon has been observed in many traditional markets, it remains unclear whether…
Humanity has been fascinated by the pursuit of fortune since time immemorial, and many successful outcomes benefit from strokes of luck. But success is subject to complexity, uncertainty, and change - and at times becoming increasingly…
A principal must allocate a set of heterogeneous tasks (or objects) among multiple agents. The principal has preferences over the allocation. Each agent has preferences over which tasks they are assigned, which are their private…