Related papers: Temptation: Immediacy and certainty
This paper explores the behavior of present-biased agents, that is, agents who erroneously anticipate the costs of future actions compared to their real costs. Specifically, the paper extends the original framework proposed by Akerlof…
We study the testable implications of models of dynamically inconsistent choices when planned choices are unobservable, and thus only "on path" data is available. First, we discuss the approach in Blow, Browning and Crawford (2021), who…
When decision makers evaluate a sequence of rewards, they may pay more attention to larger rewards and, given attention is limited, less attention to smaller rewards. They may also become less attentive to each reward when attention is…
Many physical phenomena are modeled as stochastic searchers looking for targets. In these models, the probability that a searcher finds a particular target, its so-called hitting probability, is often of considerable interest. In this work…
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…
Asynchrony, overlaps and delays in sensory-motor signals introduce ambiguity as to which stimuli, actions, and rewards are causally related. Only the repetition of reward episodes helps distinguish true cause-effect relationships from…
In many situations people make sequences of similar, but unrelated decisions. Such decision sequences are prevalent in many important contexts including judicial judgments, loan approvals, college admissions, and athletic competitions. A…
Dynamic decisions are pivotal to economic policy making. We show how existing evidence from randomized control trials can be utilized to guide personalized decisions in challenging dynamic environments with budget and capacity constraints.…
We study the impact of learning on the optimal policy and the time-to-decision in an infinite-horizon Bayesian sequential decision model with two irreversible alternatives, exit and expansion. In our model, a firm undertakes a small-scale…
Snapshots of "best" (or "worst") experience are known to dominate human memory and may thus also have a significant effect on future behaviour. We consider here a model of repeated decision-making where, at every time step, an agent takes…
We study sequential decision making in environments where rewards are only partially observed, but can be modeled as a function of observed contexts and the chosen action by the decision maker. This setting, known as contextual bandits,…
The problem of scheduling with testing in the framework of explorable uncertainty models environments where some preliminary action can influence the duration of a task. In the model, each job has an unknown processing time that can be…
An agent choosing between various actions tends to take the one with the lowest cost. But this choice is arguably too rigid (not adaptive) to be useful in complex situations, e.g., where exploration-exploitation trade-off is relevant in…
We investigate how the choice of decision makers can be varied under the presence of risk and uncertainty. Our analysis is based on the approach we have previously applied to individual decision makers, which we now generalize to the case…
Partnering with a large online retailer, we consider the problem of sending daily personalized promotions to a userbase of over 20 million customers. We propose an efficient policy for determining, every day, the promotion that each…
Procyclicality of historical risk measure estimation means that one tends to over-estimate future risk when present realized volatility is high and vice versa under-estimate future risk when the realized volatility is low. Out of it…
A sender persuades a strategically naive decisionmaker (DM) by committing privately to an experiment. Sender's choice of experiment is unknown to the DM, who must form her posterior beliefs nonparametrically by applying some learning rule…
This paper compares statistical experiments in discounted problems, ranging from the simplest ones where the state is fixed and the flow of information exogenous to more complex ones, where the decision-maker controls the flow of…
We investigate a value-maximizing problem incorporating a human behavior pattern: present-biased-ness, for a firm which navigates strategic decisions encompassing earning retention/payout and capital injection policies, within the framework…
When a new product or technology is introduced, potential consumers can learn its quality by trying the product, at a risk, or by letting others try it and free-riding on the information that they generate. We propose a dynamic game to…