Related papers: Absolute and Relative Ambiguity Attitudes
Positivity, the assumption that every unique combination of confounding variables that occurs in a population has a non-zero probability of an action, can be further delineated as deterministic positivity and stochastic positivity. Here, we…
Learning the preferences of a human improves the quality of the interaction with the human. The number of queries available to learn preferences maybe limited especially when interacting with a human, and so active learning is a must. One…
Evidence suggests that participants in strategy-proof matching mechanisms play dominated strategies. To explain the data, we introduce expectation-based loss aversion into a school-choice setting and characterize choice-acclimating personal…
We consider the phenomenon of opinion shift to the extreme reported in the social psychology literature. We argue that a good candidate to model this phenomenon can be a new variant of the bounded confidence (BC) model, the smooth BC model…
Using theory and experiments, this paper shows that the difficulty of making tradeoffs offers a parsimonious explanation for a wide range of behavioral phenomena. We develop a model of imprecise comparisons applicable to multiattribute,…
Diversification is the typical investment strategy of risk-averse agents. However, non-diversified positions that allocate all resources to a single asset, state of the world or revenue stream are common too. We show that whenever finitely…
The paper adresses the problem of reasoning with ambiguities. Semantic representations are presented that leave scope relations between quantifiers and/or other operators unspecified. Truth conditions are provided for these representations…
We provide an axiomatic characterization of lexicographic preferences over the set of all random availability functions using two assumptions. The first assumption is strong monotonicity, which in our framework is equivalent to the strong…
This paper proposes a unified theoretical model to identify and test a comprehensive set of probabilistic updating biases within a single framework. The model achieves separate identification by focusing on the updating of belief…
We characterize decreasing impatience, a common behavioral phenomenon in intertemporal choice. Discount factors that display decreasing impatience are characterized through a convexit y axiom for investments at fixed interest rates. Then we…
An investor with constant relative risk aversion trades a safe and several risky assets with constant investment opportunities. For a small fixed transaction cost, levied on each trade regardless of its size, we explicitly determine the…
From scientific experiments to online A/B testing, the previously observed data often affects how future experiments are performed, which in turn affects which data will be collected. Such adaptivity introduces complex correlations between…
Confirmation bias is a cognitive bias that adversely affects management decisions, and mathematical modelling is an aid to its detailed understanding. Bias in opinion update about the value of a parameter is modelled here assuming that…
We propose and develop an algebraic approach to revealed preference. Our approach dispenses with non algebraic structure, such as topological assumptions. We provide algebraic axioms of revealed preference that subsume previous, classical…
A principal hires an agent to acquire soft information about an unknown state. Even though neither how the agent learns nor what the agent discovers are contractible, we show the principal is unconstrained as to what information the agent…
In this work we generalize standard Decision Theory by assuming that two outcomes can also be incomparable. Two motivating scenarios show how incomparability may be helpful to represent those situations where, due to lack of information,…
Fluctuation relations are powerful equalities that hold far from equilibrium. However, the standard approach to include measurement and feedback schemes may become inapplicable in certain situations, including continuous measurements,…
We show that in delegation problems, a principal benefits from belief misalignment vis-\`a-vis an agent when the latter can flexibly acquire costly information. The agent optimally succumbs to confirmatory learning, leading him to favor the…
We consider the problem of Adverse Selection and optimal derivative design within a Principal-Agent framework. The principal's income is exposed to non-hedgeable risk factors arising, for instance, from weather or climate phenomena. She…
Sensitivity analysis informs causal inference by assessing the sensitivity of conclusions to departures from assumptions. The consistency assumption states that there are no hidden versions of treatment and that the outcome arising…