Related papers: Price-Based Attention and Welfare
In fair division problems, the notion of price of fairness measures the loss in welfare due to a fairness constraint. Prior work on the price of fairness has focused primarily on envy-freeness up to one good (EF1) as the fairness…
Social goods are goods that grant value not only to their owners but also to the owners' surroundings, be it their families, friends or office mates. The benefit a non-owner derives from the good is affected by many factors, including the…
We study the subtlety of optimal paternalism when a utilitarian planner has the power to design a discrete choice set for a heterogeneous population with bounded rationality. We first consider the planning problem in abstraction. We show…
A family of models of individual discrete choice are constructed by means of statistical averaging of choices made by a subject in a reinforcement learning process, where the subject has short, k-term memory span. The choice probabilities…
We analyze and quantify, in a financial market with parameter uncertainty and for a Constant Relative Risk Aversion investor, the utility effects of two different boundedly rational (i.e., sub-optimal) investment strategies (namely, myopic…
Participatory budgeting (PB) is a voting paradigm for distributing a divisible resource, usually called a budget, among a set of projects by aggregating the preferences of individuals over these projects. It is implemented quite extensively…
The process of consumer decision-making is multidimensional, and price perception is a very important but still not well-understood dimension for both marketers and consumers. Although heuristics or mental shortcuts are seen as biased and…
Income- and price-elasticity of demand quantify the responsiveness of markets to changes in income, and in prices, respectively. Under the assumptions of utility maximization and preference-independence (additive preferences), mathematical…
In recent years many important societal decisions are made by machine-learning algorithms, and many such important decisions have strict capacity limits, allowing resources to be allocated only to the highest utility individuals. For…
I study altruistic choices through the lens of a cognitively noisy decision-maker. I introduce a theoretical framework that demonstrates how increased cognitive noise can directionally affect altruistic decisions and put its implications to…
This paper proposes a theory of pricing premised upon the assumptions that customers dislike unfair prices---those marked up steeply over cost---and that firms take these concerns into account when setting prices. Since they do not observe…
This paper investigates the value of recommendations for disseminating economic information, with a focus on frictions resulting from preference heterogeneity. We consider Bayesian expected-payoff maximizers who receive non-strategic…
Randomized mechanisms, which map a set of bids to a probability distribution over outcomes rather than a single outcome, are an important but ill-understood area of computational mechanism design. We investigate the role of randomized…
Welfare maximization in bilateral trade has been extensively studied in recent years. Previous literature obtained incentive-compatible approximation mechanisms only for the private values case. In this paper, we study welfare maximization…
Estimating consumer preferences is central to many problems in economics and marketing. This paper develops a flexible framework for learning individual preferences from partial ranking information by interpreting observed rankings as…
Selling a single item to $n$ self-interested buyers is a fundamental problem in economics, where the two objectives typically considered are welfare maximization and revenue maximization. Since the optimal mechanisms are often impractical…
The rapid growth of e-commerce has made people accustomed to shopping online. Before making purchases on e-commerce websites, most consumers tend to rely on rating scores and review information to make purchase decisions. With this…
A monopoly seller is privately and imperfectly informed about the buyer's value of the product. The seller uses information to price discriminate the buyer. A designer offers a mechanism that provides the seller with additional information…
The Random Utility Model (RUM) is the leading model to represent the aggregate choices of a heterogeneous population of preference maximizers. We show that if (and only if) preferences are sufficiently uncorrelated, RUM choices can also be…
Information policies such as scores, ratings, and recommendations are increasingly shaping society's choices in high-stakes domains. We provide a framework to study the welfare implications of information policies on a population of…