Related papers: Defaults: a double-edged sword in governing common…
In mainstream neoclassical economics, utility maximization is the only engine of individual action, and the other or the social, if it is modeled for decisions deemed fundamental, it is done as a tacit externality parameter affecting an…
The classical reduced-form and filtration expansion framework in credit risk is extended to the case of multiple, non-ordered defaults, assuming that conditional densities of the default times exist. Intensities and pricing formulas are…
We study how governments promote social welfare through the design of contracting environments. We model the regulation of contracting as default delegation: the government chooses a delegation set of contract terms it is willing to…
Groups make decisions on both the production and the distribution of resources. These decisions typically involve a tension between increasing the total level of group resources (i.e. social efficiency) and distributing these resources…
An individually costly act that benefits all group members is a public good. Natural selection favors individual contribution to public goods only when some benefit to the individual offsets the cost of contribution. Problems of sex ratio,…
This study proposes a tractable stochastic choice model to identify motivations for prosocial behavior, and to explore alternative motivations of deliberate randomization beyond ex-ante fairness concerns. To represent social preferences, we…
We ask if participants in a choice experiment with repeated presentation of the same menus and no feedback provision: (i) exhibit overall behaviour that is consistent with ordinal and expected utility theory under *weak* preferences; (ii)…
For societies to produce or safeguard public goods, costly voluntary contributions are often required. From the perspective of each individual, however, it is advantageous not to volunteer such contributions, in the hope that other…
We study multiple defaults where the global market information is modelled as progressive enlargement of filtrations. We shall provide a general pricing formula by establishing a relationship between the enlarged filtration and the…
The conflict between pro-self and pro-social behaviour is at the core of many key problems of our time, as, for example, the reduction of air pollution and the redistribution of scarce resources. For the well-being of our societies, it is…
Across many domains of interaction, both natural and artificial, individuals use past experience to shape future behaviors. The results of such learning processes depend on what individuals wish to maximize. A natural objective is one's own…
The possibility of exploiting multiple resources is usually regarded as positive from both the economic and the environmental point of view. However, resource switching may also lead to unsustainable growth and, ultimately, to an…
We study preferences estimated from finite choice experiments and provide sufficient conditions for convergence to a unique underlying "true" preference. Our conditions are weak, and therefore valid in a wide range of economic environments.…
Policy learning algorithms are widely used in areas such as personalized medicine and advertising to develop individualized treatment regimes. However, most methods force a decision even when predictions are uncertain, which is risky in…
The functioning of animal as well as human societies fundamentally relies on cooperation. Yet, defection is often favorable for the selfish individual, and social dilemmas arise. Selection by individuals' fitness, usually the basic driving…
The tragedy of the commons has traditionally been framed as a problem of resource overuse driven by self-interested exploitation. In contrast, growing empirical evidence shows that insufficient use or abandonment of natural resources, known…
We study the evolution of public cooperation on two interdependent networks that are connected by means of a utility function, which determines to what extent payoffs in one network influence the success of players in the other network. We…
This paper develops a framework to study the statistical power of revealed-preference tests. With randomly sampled budgets and mild smoothness of demand, statistical learning implies that any model consistent with the data must approximate…
In this paper, we work in the framework of the Merton problem but we impose a drawdown constraint on the consumption process. This means that consumption can never fall below a fixed proportion of the running maximum of past consumption. In…
Social dilemmas are an integral part of social interactions. Cooperative actions, ranging from secreting extra-cellular products in microbial populations to donating blood in humans, are costly to the actor and hence create an incentive to…