Related papers: Beyond the Mean: Testing Consumer Rationality thro…
Given a consumer data-set, the axioms of revealed preference proffer a binary test for rational behaviour. A natural (non-binary) measure of the degree of rationality exhibited by the consumer is the minimum number of data points whose…
Rational respondents to economic surveys may report as a point forecast any measure of the central tendency of their (possibly latent) predictive distribution, for example the mean, median, mode, or any convex combination thereof. We…
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…
We embed buying rights into a (repeated) Arrow-Debreu model to study the long-term effects of regulation through buying rights on arising inequality. Our motivation stems from situations that typically call for regulatory interventions,…
Rationality is frequently associated with making the best possible decisions. It's widely acknowledged that humans, as rational beings, have limitations in their decision-making capabilities. Nevertheless, recent advancements in fields,…
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.…
This paper develops and implements a nonparametric test of Random Utility Models. The motivating application is to test the null hypothesis that a sample of cross-sectional demand distributions was generated by a population of rational…
An important goal of empirical demand analysis is choice and welfare prediction on counterfactual budget sets arising from potential policy-interventions. Such predictions are more credible when made without arbitrary…
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…
In this paper, we build a new test of rational expectations based on the marginal distributions of realizations and subjective beliefs. This test is widely applicable, including in the common situation where realizations and beliefs are…
An analyst observes an agent take a sequence of actions. The analyst does not have access to the agent's information and ponders whether the observed actions could be justified through a rational Bayesian model with a known utility…
We show how to achieve the notion of "multicalibration" from H\'ebert-Johnson et al. [2018] not just for means, but also for variances and other higher moments. Informally, it means that we can find regression functions which, given a data…
We establish a general concentration result for the 1-Wasserstein distance between the empirical measure of a sequence of random variables and its expectation. Unlike standard results that rely on independence (e.g., Sanov's theorem) or…
We introduce a kernel-based goodness-of-fit test for censored data, where observations may be missing in random time intervals: a common occurrence in clinical trials and industrial life-testing. The test statistic is straightforward to…
We study random utility (RU) rationality with aggregation when the underlying alternatives in each aggregate vary across consumers and are unobserved, as is typical for an outside option. RUM over the underlying alternatives is the natural…
This paper revisits the classic instrument choice problem in a setting with consumption externalities, through the lens of robust mechanism design. A regulator can implement any incentive-compatible policy but is uncertain about how…
We derive tractable necessary and sufficient conditions for the absence of buy-and-hold arbitrage opportunities in a perfectly liquid, one period market. We formulate the positivity of Arrow-Debreu prices as a generalized moment problem to…
Controlled experiments (A/B tests or randomized field experiments) are the de facto standard to make data-driven decisions when implementing changes and observing customer responses. The methodology to analyze such experiments should be…
Experimental work regularly finds that individual choices are not deterministically rationalized by well-defined preferences. Nonetheless, recent work shows that data collected from many individuals can be stochastically rationalized by a…
The performance of an energy system under a real-time pricing mechanism depends on the consumption behavior of its customers, which involves uncertainties. In this paper, we consider a system operator that charges its customers with a…