home

Research

 

Consumer Surplus in the Dark, with Pavel Kocourek and Colin Stewart, presentation

A growing body of evidence suggests that consumers are not fully informed about prices, contrary to a critical assumption of classical welfare analysis. We analyze a model in which consumers can vary in both their preferences and their information about prices. Given an aggregate demand curve and a distribution of prices, we identify the set of rationalizable aggregate consumer surpluses. Each surplus in this set can be rationalized with simple information structures and preferences. We also identify the range of possible changes in surplus associated with a marginal change in the distribution of prices.

 

Endogenous Risk Attitudes, with Nick Netzer, Arthur Robson and Pavel Kocourek, presentation

In a model inspired by neuroscience, we show that constrained optimal perception encodes lottery rewards using an S-shaped encoding function and over-samples low-probability events. The implications of this perception strategy for behavior depend on the decision-maker's understanding of the risk. The strategy does not distort choice in the limit as perception frictions vanish when the decision-maker fully understands the decision problem. If, however, the decision-maker underrates the complexity of the decision problem, then risk attitudes reflect properties of the perception strategy even for vanishing perception frictions. The model explains adaptive risk attitudes and probability weighting, as in prospect theory and, additionally, predicts that risk attitudes are strengthened by time pressure and attenuated by anticipation of large risks.

 

Attention Please! with Olivier Gossner and Colin Stewart, 2021, Econometrica 89(4), 1717-1751, presentation, puzzle

We study the impact of manipulating the attention of a decision-maker who learns sequentially about a number of items before making a choice. Under natural assumptions on the decision-maker's strategy, directing attention toward one item increases its likelihood of being chosen regardless of its value. This result applies when the decision-maker can reject all items in favor of an outside option with known value; if no outside option is available, the direction of the effect of manipulation depends on the value of the item. A similar result applies to manipulation of choices in bandit problems.

 

Optimal Test Allocation, with Jeff Ely, Andrea Galeotti and Ole Jann, 2021, Journal of Economic Theory 105236

A health authority chooses a binary action for each of several individuals that differ in their pretest probabilities of being infectious and in the additive losses associated with two types of decision errors. The authority is endowed with a portfolio of tests that differ in their sensitivities and specificities. We derive a simple necessary condition for optimality of test allocation. In special cases, precision parameters of the allocated test are monotone in the individuals' types. We characterize the marginal benefit of a test, provide an algorithmic solution for the test-allocation problem and consider the benefits of confirmatory testing.

 

Rotation as Contagion Mitigation, with Jeff Ely and Andrea Galeotti, Management Science 2021, 67(5), 3117-3126 (ideas from this paper have been incorporated into the DELVE report of the Royal Society)

To prevent the spread of an infection an organization obeys social distancing restrictions and thus limits the number of its members physically present on a given day.  We study rotation schemes in which mutually exclusive groups are active on different days. The frequency of rotation affects risk over the duration of diffusion prior to the time the organization is able to react to the infection. If this reaction time is speedy, then such risk is undesirable since prevalence is initially convex in time. In this case, frequent rotation acts as insurance against exposure-time risk and is optimal. Infrequent rotation becomes optimal if the organization reacts slowly. Cross-mixing of the rotating subpopulations is detrimental because it increases contacts between sick and healthy individuals. However, the effect of mixing is small if the terminal prevalence is low in the absence of mixing.

 

Habits as Adaptations: An Experimental Study, with Lida Matyskova, Brian Rogers, and Keh-Kuan Sun, presentation, Games and Economic Behaviour July 2020, p. 391-406

Selective Sampling with Information-Storage Constraints, with Philippe Jehiel, presentation, Economic Journal, August 2020, p. 1753-1781

On the Cost of Misperception: General Results and Behavioral Applications, with Olivier Gossner, Journal of Economic Theory 177, September 2018, 816-847, presentation

Rational Inattention Dynamics: inertia and delay in decision-making 2017, Econometrica 85(2), 521-553,with Colin Stewart and Filip Matějka, presentation, popularizační přednáška

Perceiving Prospects Properly, with Colin Stewart, 2016, American Economic Review 106, 1601-31. presentationpress summary by AEA

Price Distortions under Coarse Reasoning with Frequent Trade, with Colin Stewart, 2015, J. Econ. Theory 159, 574-595. Presentation, Supplement

Influential Opinion Leaders, with Colin Stewart and Antoine Loeper, 2014, Economic Journal 124, 1147–1167.

Tractable Dynamic Global Games and Applications, with Laurent Mathevet, 2013, J. Econ. Theory 148, 25832619.

Reversibility in Dynamic Coordination Problems, with Eugen Kováč, 2013, Games and Economic Behavior 77, 298–320.

Who Matters in Coordination Problems?, with József Sákovics, 2012, American Economic Review 102(7), 3439–3461.

Dynamic Coordination with Private Learning, with Amil Dasgupta and Colin Stewart, 2012, Games and Economic Behavior 74, 83–101.

Communication, Timing, and Common Learning, with Colin Stewart, 2011, J. Econ. Theory 146, 230–247. (the paper explained on the blog of Jeff Ely).

Contagion through Learning, with Colin Stewart, 2008, Theoretical Economics 3, 431–458.

Coordination of Mobile Labor, 2008, J. Econ. Theory 139(1), 25–46.

Coordination Cycles, 2008, Games and Economic Behavior 63(1), 308–327.


The Effects of Risk Aversion in Mixed-Strategy Equilibria of 2x2 Games, with Dirk Engelmann, 2007, Games and Economic Behavior 60, 381–388.

A Trace of Anger is Enough: On the Enforcement of Social Norms, 2007, Economics Bulletin, vol. 8. expanded version

Dynamic scaling and universality in evolution of fluctuating random networks,  with Kotrla M. and F. Slanina, 2002, Europhys. Lett. 60, 14
20.

 

 

 

 Essays on Roma

 

return to homepage