Research
peer reviewed journal publications
Journal of Economic Behavior and Organization, 2023
Abstract: As is well-known, choices of a decision maker (DM) who attempts self-control in the face of temptation may exhibit menu effects and “non-standard” patterns. Existing models can accommodate some of these patterns but not others; e.g., they can explain self-control undermining menu effects, but not self-control enhancing ones. We introduce a model of self-control with the goal of better understanding and accounting for such effects. The basic idea underlying our model is that the DM experiences a psychological cost if she succumbs to temptation and chooses in a manner that is totally antithetical to her commitment preferences. To mitigate such costs, in any menu, her expression of self-control involves, first, eliminating a subset of alternatives that are worst according to her commitment preferences, with the elimination process being reference-dependent. Then, amongst the remaining alternatives, she chooses the best one according to her temptation preferences. Besides studying menu effects, we characterize the model behaviorally based on a novel axiom called WARP with norms. We also show that the model is well-identified.
Arrowian social equilibrium: Indecisiveness, influence and rational social choices under majority rule (joint with Raghvi Garg and Nitesh Singh)
B.E. Journal of Theoretical Economics, 2022
Abstract: We introduce the concept of an Arrowian social equilibrium that inverts the schemata of Arrow (1950)’s famous impossibility theorem and captures the possibility of aggregating non-rational individual preferences into rational social preferences while respecting the Arrowian desiderata. Specifically, we consider individuals whose preferences may not be complete and who, accordingly, may be indecisive when faced with an issue. Breaking with tradition, we consider the possibility of such individuals drawing on their beliefs about society’s preferences that result from the aggregation process to resolve their indecisiveness. Formally, individual choices are modeled as a rational shortlist method (Manzini and Mariotti, 2007), with own preferences followed by society’s as the pair of ordered rationales. This results in a mutual interaction between individual and social choices. We study this interaction using majority rule as the aggregator, with an Arrowian social equilibrium specifying how individual and social choices are co-determined, while requiring the latter to be rational. Our main result identifies minimal levels of societal indecisiveness needed to guarantee the existence of such equilibrium.
Economic Bulletin, 2021, Volume 41, Issue 4, 2348-2355
Abstract: We model the behavior of a decision maker (DM) who is psychologically constrained from choosing according to her tastes by her normative preferences that capture her values and ideals. In any menu, choosing the worst alternative according to her normative preferences may produce overwhelming feelings of guilt. Hence, to mitigate such feelings, she eliminates this alternative and chooses the best amongst the remaining ones according to her tastes. We formally define this sequential choice procedure and behaviorally characterize it. We show that the parameters of the model—the DM’s tastes and norms—can be (almost) uniquely identified from choices. We also highlight the model's implications for "non-standard" choices.
Economic Theory, July 2021, Volume 72, 167–199
Abstract: We revisit, within Harsanyi’s impartial observer setting, the question of foundations underlying procedural fairness concerns in welfare judgments. In our setup—that of allocating an indivisible good using a lottery—such concerns, presumably, matter. We draw from the social preferences literature and relax a typical assumption made while addressing this question, namely, that individuals in society do not care about procedural fairness and such concerns arise exclusively at a societal level, which are captured by non-linear social welfare functions (SWFs). In our model, individual attitudes towards procedural fairness are identified and factored into welfare judgments. Specifically, we provide an axiomatic basis within Harsanyi’s (1955) framework to represent procedural fairness sensitive individual preferences by the representation in Karni and Safra (2002). We then show, in terms of underlying axioms, how such individual assessments incorporating both risk and procedural fairness attitudes can be aggregated by means of utilitarian and generalized utilitarian SWFs.
Economic Inquiry, July 2019, Volume 57 (3), 1617-1635
Abstract: We address a common criticism directed towards models of expressive voting that they are ad hoc in nature. To that end, we propose a foundation for expressive behavior that is based on a novel theory of social preferences under risk. Under our proposal, expressive considerations in behavior arise from the particular way in which risky social prospects are assessed by decision makers who want to interpret their choices as moral. To illustrate the scope of our framework, we use it to address some key questions in the literature on expressive voting: why, for expressive considerations, might voters vote against their self-interest in large elections and why might such elections exhibit a moral bias (Feddersen et al. 2009). Specifically, we consider an electoral set-up with two alternatives and explain why, when the size of the electorate is large, voters may want to vote for the alternative they deem morally superior even if this alternative happens to be strictly less preferred, in an all-inclusive sense, than the other.
Theory and Decision, May 2019, Volume 86 (3), 401-420
Abstract: We address the oft-repeated criticism that the demands which the rational choice approach makes on the knowledge and cognition of a decision maker (DM) are way beyond the capabilities of typical human intelligence. Our key finding is that it may be possible to arrive at this ideal of rationality by means of cognitively less demanding, heuristic-based ecological reasoning that draws on information about others’ choices in the DM’s environment. Formally, we propose a choice procedure under which, in any choice problem, the DM, first, uses this information to shortlist a set of alternatives. The DM does this shortlisting by a mental process of categorization whereby she draws similarities with certain societal members—the ingroup—and distinctions from others—the outgroup—and considers those alternatives that are similar (dissimilar) to ingroup (outgroup) members’ choices. Then, she chooses from this shortlisted set by applying her preferences, which may be incomplete owing to limitations of knowledge. We show that if a certain homophily condition connecting the DM’s preferences with her ingroup-outgroup categorization holds, then the procedure never leads the DM to making bad choices. If, in addition, a certain shortlisting consistency condition holds vis-a-vis non-comparable alternatives under the DM’s preferences, then the procedure results in rational choices.
The Anscombe-Aumann Representation and the Independence Axiom: A Reconsideration (joint with Christopher Kops)
Theory and Decision, February 2016, Volume 80 (2), 211–226
Abstract: We provide a new behavioral foundation for subjective expected utility (SEU) within the Anscombe-Aumann framework. In contrast to the original axiomatization of SEU, our behavioral foundation establishes that to be consistent with SEU maximization, we need not explicitly assume that preferences satisfy the independence axiom over the domain of all acts. Rather, the substantive implications of independence for an SEU representation may equivalently be derived from less demanding conditions over certain smaller classes of acts. These acts, which we refer to as uncertainty-free comparable acts, have the property that they are relatively simple for a decision maker to compare because she can rank acts within any such class based on her risk preferences alone, without having to consider the underlying uncertainty. Acts of this kind comprise constant acts and acts that are almost identical in the sense that they differ from one another in at most one state.
other publications
Handbook on Economics of Discrimination and Affirmative Action, Springer, 2022.
Abstract: The review provides an overview of the literature that uses experimental implementations of the dictator, ultimatum, and trust games to study patterns of discrimination. The focus is on work using lab-induced and natural identities to study group-sensitive behavior. Methodological issues along with results and insights are emphasized.
Robustness of the Uniqueness of Equilibrium with Cobb-Douglas Utilities (joint with David Cass, Kyungmin Kim, Maxim Kryshko, Antonio Penta and Jonathan Pogach)
The Collected Scientific Work of David Cass: Part C (ed. Stephen Spear), Emerald Group Publishing Limited (2011)
Abstract: The majority of results in the literature on general equilibrium are not for an economy (i.e. given an endowment and preferences), but rather, for a set of economies (i.e. a set of endowments given preferences). Therefore, we argue that the most appropriate robustness result requires perturbing economies uniformly over the space of endowments for which the result is obtained. In this paper, we examine the robustness of the uniqueness of Walrasian endowment economies with Cobb-Douglas utility functions under this interpretation of robustness. Namely, we prove that for economies described by Cobb-Douglas utilities and all endowments in a fixed set, uniqueness of equilibrium is robust to perturbations of the utility functions.
working papers
Social influence within clusters and stochastic choices (joint with Raghvi Garg and Ojasvi Khare)
Abstract: We introduce a theory of socially influenced stochastic choices. Social influence in our approach stems from individuals in society forming clusters, e.g., clusters on social media like echo chambers, political clusters formed along partisan divides, clusters in friendship networks, etc. When such clusters form, individuals may be influenced by dominant modes of behavior within their cluster. The interactive choice procedure we introduce models this. Under it, the more frequently an alternative is perceived to be chosen in a cluster, the greater the probability that any individual in that cluster considers it. An individual’s choice probabilities, in turn, are determined from these consideration probabilities according to the random consideration set rule of Manzini and Mariotti (2014). Influence within clusters is mutual and our procedure captures the steady state choice profile of this interactive decision making process. We establish that these interactions are mutually consistent and such a profile exists. We behaviorally characterize the procedure. Further, we show that the procedure can be uniquely identified from choice data; specifically, societal clusters, individual preferences, and idiosyncratic susceptibilities to influence are all identifiable from behavior.
Abstract: We propose and axiomatize a decision model of social preferences under risk that captures motivated reasoning in social assessments. Our model considers a setup with a decision maker (DM) and one other individual. It highlights how the presence of risk enables the DM to egoistically exploit the distinction between the other individual’s ex post outcome and his ex ante opportunity, and reason about her choices in a motivated way as more moral than what a consequentialist assessment would mandate. In turn, this allows her to exploit moral wiggle room, behave more selfishly in the presence of risk than under certainty, be more risk loving over others’ risks than her own and justify higher levels of ex post inequalities. Our axiomatization draws on Gul (1991)’s elation/disappointment decomposition to show how the DM’s propensity towards motivated reasoning can be understood in terms of a tendency to inflate the value of elation outcomes in her assessment of risk faced by the other individual. Equivalently, it can be understood as a tendency to overweight the probabilities of his elation outcomes, `a la a motivated Bayesian. Finally, by contrasting our approach with the inequality aversion paradigm (Fehr and Schmidt, 1999), we delve into the question of why opportunity concerns matter in the context of social preferences under risk.
Abstract: We introduce a theory of socially influenced individual choices. The source of social influence on an individual are his reference groups in society, formed of societal members he psychologically or contextually relates to. Choices made within an individual’s reference groups have an influence on the choices he makes. Specifically, we propose a choice procedure under which, in any choice problem, he considers only those alternatives that he can identify with at least one of his reference groups. From this "consideration set," he chooses the best alternative according to his preferences. The procedure is an interactive one and captures the steady state of a process of mutual social influence. We behaviorally characterize this choice procedure. We also highlight the empirical content of the procedure by relating it to both experimental evidence and real world applications.
Abstract: We model the behavior of a decision maker who exercises self-control to address an intrapersonal conflict between what she wants to do (her “want-self”) and what she thinks she should do (her “should-self”). In any menu, her expression of self- control involves, first, eliminating a subset of alternatives that are worst according to her should-self which, if chosen, induces guilt. Then, amongst the remaining alternatives, she chooses the best one according to her want-self. We characterize the model behaviorally and determine the extent to which the preferences of the two selves and the alternatives eliminated in any menu are uniquely identified. We compare and contrast the model’s implications for “non-standard” choices with existing models of self-control.