Abstract: In this article, we discuss some aspects of Eliaz and Ok ’s (Games Econ Behav 56:61–86, 2006) choice theoretical foundations of incomplete preferences. Our aim is to clarify some aspects of their regularity condition for preorders, showing that, as far as rationalization of a choice correspondence alone is concerned, no further restriction is imposed by requiring the preorder to be regular. However, if one is also interested in capturing other observable aspects of the individual’s choice procedure, such as Eliaz and Ok’s notion of c-incomparability or the notion of behavioral indifference introduced in this paper, then the only option is to use a regular preorder. We also argue that their weak axiom of revealed non-inferiority (WARNI) is too strong a property if our aim is to characterize the rationalizability of a choice correspondence by a (possibly incomplete) preorder. Finally, as we have mentioned above, we introduce the notion of behavioral indifference and argue, not only that Eliaz and Ok’s notion of c-incomparability (observable incomparability) can be derived from it, but also that it has a wider range of applicability than their notion of observable incomparability. 

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Abstract: People often need to plan how to allocate their attention across different tasks. In this paper, we run two experiments to study a stylized version of this attention allocation problem between strategic tasks. More specifically, we present subjects with pairs of 2x2 games, and, for each pair, we give them 10 seconds to decide how they would split a fixed time budget between the two games. Then subjects play both games without time constraints, and we use eye-tracking to estimate the fraction of time they spend on each game. We find that subjects’ planned and actual attention allocation differ and identify the determinants of this mismatch. Further, we argue misallocations can be relevant in games where a player’s strategy choice is sensitive to the time taken to reach a decision.

Last update: 11/15/2022

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Abstract: This paper proposes a new approach to assess the extent to which choices depart from the rational choice model (i.e., from preference maximization). The approach relies on the equivalence of two intuitive and normatively appealing criteria to compare when one person's choices are more compatible with preference maximization than another's. These criteria thus induce the same incomplete ranking of the relative compatibility of choices with rational choice. I show that this ranking reacts to the severity of different violations of rational choice. I also characterize what indices used to quantify departures from rational choice agree with it and use this characterization to propose a new family of indices that address some of the shortcomings of the well-known Houtman-Maks index (Houtman and Maks, 1985).

Last update: 27/09/2024

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Abstract: Economists often rely on people’s choices to infer their preferences. However, inferring preferences from choices is problematic when people face unobserved constraints. In this paper, I study how to (cautiously) infer preferences from choices when the choices of the members of a social group are subject to a constraint that we only imperfectly know. When this happens, heterogeneity in the group’s choices and more information about the constraint help recover group members’ preferences, whereas homogeneity in choices hinders it. I further show that a well-known approach for choice-based welfare analysis makes misleading inferences about preferences and efficiency in this context.

Last update: 15/10/2024

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Abstract: There are two ways in which people usually engage with contracts—compensation schemes to execute tasks. They can choose between them (contract choice) or allocate time across them (contract time allocation). In this paper, we study how people behave in each of these problems. A standard model suggests that drafting a cost-effective contract that both induces an agent to choose it and allocate time to it presents a significant challenge. However, our experimental results indicate that this tradeoff might be less pronounced than the model predicts due to what we call the attractiveness bias–a tendency for subjects to allocate more time to contracts they find appealing, even when the model suggests they should get relatively little time.

Last update: 02/04/2025

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Abstract: Will competition between firms in the job market increase efficiency and reduce discrimination? We propose a simple hiring model in a market where the worker's productivity is unknown and the minimum wage is not too low. We then show that, under these conditions, competition leads to a constrained-inefficient and potentially discriminatory outcome because it creates a hold-up problem that reduces the firm's incentives to experiment. Since more competition amplifies this hold-up problem, workers of social groups that face greater informational disadvantages---such as being perceived as less productive or having worse signaling technologies---are more likely to remain unemployed as competition increases, increasing discrimination.

Last update: 29/01/2025

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Abstract:  We study the problem of testing whether choices are compatible with maximizing an incomplete preference over an arbitrary collection of menus. In sharp contrast to when preferences are complete, testing for compatibility with the model might require an infinite dataset when the set of alternatives is infinite, and is an NP-complete decision problem when the set of alternatives is finite. Using tools from mixed-integer linear programming, we design an algorithm to test for compatibility with the model and show that it performs well in simulated choices. When we apply the algorithm to two lab experiments, we find that dropping completeness can substantially increase the proportion of subjects whose behavior is compatible with preference maximization.

Last update: 12/03/2025

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