PRIMARY FIELDS OF SPECIALIZATION
PRIMARY FIELDS OF SPECIALIZATION
Microeconomic Theory, Bounded Rationality, Choice Theory, Decision Theory
Microeconomic Theory, Bounded Rationality, Choice Theory, Decision Theory
Limited attention and models of choice: A behavioral equivalence, with D. Carpentiere, Mathematical Social Sciences (2025)
We show that many models of choice can be alternatively represented as special cases of choice with limited attention (Masatlioglu, Nakajima, and Ozbay, 2012), singling out the properties of the unobserved attention filters that explain the observed choices. For each specification, information about the DM’s consideration sets and preference is inferred from violations of the contraction consistency axiom, and it is compared with the welfare indications obtained from equivalent models. Remarkably, limited attention always supports the elicitation of DM’s taste arising from alternative methods. Finally, we examine the intersections between subclasses, and we verify that each of them is independent of the others.
The dynamics of higher-order novelties, with G. Di Bona, A. Bellina, G. De Marzo, I. Iacopini, and V. Latora, Nature Communications (2025)
Studying how we explore the world in search of novelties is key to understand the mechanisms that can lead to new discoveries. Previous studies analyzed novelties in various exploration processes, defining them as the first appearance of an element. However, novelties can also be generated by combining what is already known. We hence define higher-order novelties as the first time two or more elements appear together, and we introduce higher-order Heaps’ exponents as a way to characterize their pace of discovery. Through extensive analysis of real-world data, we find that processes with the same pace of discovery, as measured by the standard Heaps’ exponent, can instead differ at higher orders. We then propose to model an exploration process as a random walk on a network in which the possible connections between elements evolve in time. The model reproduces the empirical properties of higher-order novelties, revealing how the network we explore changes over time along with the exploration process.
Simon's bounded rationality, with A. Giarlotta, Decisions in Economics and Finance (2024)
This note in the Milestones series is dedicated to the paper "A Behavioral Model of Rational Choice", written by Herbert Simon, and published in 1955 on the Quarterly Journal of Economics.
Context-sensitive rationality: Choice by Salience, with A. Giarlotta, and S. Watson, Journal of Mathematical Economics (2023)
We describe a context-sensitive approach to individual choice, in which the explanation is provided by a family of linear orders indexed by all available items. Selection from a menu is then recovered by the classical maximization paradigm, subject to the constraint that the justifying rationale must be indexed by an item of the menu. This approach allows us to pursue two complementary goals: (1) a fine classification of all possible choices into classes of rationality, and (2) a bounded rationality model based on an ordinal notion of salience. Concerning (1), we refine the context-free model of rationalization by multiple rationales, partitioning the class of all choice functions on n items into n classes of rationality. The least rational class is expressive of a moody behavior, which is rare for small n, but prevailing for large n. Concerning (2), we enrich our framework by a binary relation of salience, which guides the selection process. Upon requiring that all rationales associated to equally salient items coincide, choice is explained by appealing to the unique linear order indexed by a maximally salient item of the menu. Choice by salience is a specification of choice with limited attention. Numerical estimates show the sharp selectivity of this model of bounded rationality.
Bounded rationality is rare, with A. Giarlotta and S.Watson, Journal of Economic Theory (2022)
Most bounded rationality properties in the literature are inherited by subchoices, but are not satisfied by at least one subchoice of most choice functions. Therefore the fraction of choice functions that can be explained by these models goes to zero as the number of items tends to infinity. Numerical estimates confirm the rarity of bounded rationality even for small sets of alternatives.
The number of boundedly rational choices on four elements, with A. Giarlotta, and S. Watson, MethodsX (2022)
We use a combinatorial approach to identify and compute the number of non-isomorphic choices on four elements that can be explained by several models of bounded rationality.
These estimates offer a tool to analyze choice experiments designed on four-element sets.
The presented methodology allows the application of an algorithm to estimate the fraction of choices justifiable by these models on finite sets.
Our approach can be extended to evaluate other – existing or future – models of bounded rationality.
Matlab code available here.
Harmful Random Utility Models (JMP)(slides)(Submitted)
In many choice settings self-punishment affects individual taste, by inducing the decision maker (DM) to disregard some of the best options. In these circumstances the DM may not maximize her true preference, but some harmful distortion of it, in which the first i alternatives are shifted, in reverse order, to the bottom. Harmful Random Utility Models (harmful RUMs), which are RUMs whose support is limited to the harmful distortions of some preference, offer a natural representation of the consequences of self-punishment on choices. Harmful RUMs are characterized by the existence of a linear order that allows to recover choice probabilities from selections over the ground set. An algorithm detects self-punishment, and elicits the DM’s unobservable tastes that explain the observed choice. Necessary and sufficient conditions for a full identification of the DM’s preference and randomization over its harmful distortions are singled out. In all but two cases, there is a unique justification by self-punishment of data. Finally, a degree of self-punishment, which measures the extent of the denial of pleasure adopted by the DM in her decision, is characterized.
A multi-self model of self-punishment (draft forthcoming)
We investigate the choice of a decision maker (DM) who harms herself, by maximizing in each menu some distortion of her true preference, in which the first i alternatives are moved, in reverse order, to the bottom. This pattern has no empirical power, but it allows to define a degree of self-punishment, which measures the extent of the denial of pleasure adopted by the DM in her decision. We characterize irrational choices displaying the lowest degree of self-punishment, and we fully identify the preferences that explain the DM's picks by a minimal denial of pleasure. Moreover, necessary and sufficient conditions for the estimation of the degree of self-punishment of a choice are singled out. Finally, we offer a simple characterization of the choice behavior that exhibits the highest degree of self-punishment, and we show that this subclass comprises almost all choices.
Separable joint choices, with D. Carpentiere, A. Giarlotta, and E. Sudano (Submitted)
We introduce a novel choice dataset, called joint choice, in which options and menus are multidimensional. In this general setting, we define a notion of choice separability, which requires that selections from some dimensions are never affected by those performed on the remaining dimensions. This yields an extension of the classical definition of separability for discrete preference relations and utility functions beyond rationality requirements. We thoroughly investigate the stability of separability across dimensions, and then suggest effective tests to check whether a joint choice is separable. Upon defining rationalizable joint choices as those explained by the maximization of a relation of revealed preference, we examine the interplay between the notions of rationalizability and separability. Finally, we show that the rationalizability of a separable joint choice can be tested by verifying the rationalizability of some derived joint choices over fewer dimensions.
The Effects of Social Pressure on Fundamental Choices: Indecisiveness and Deferral, with A. Giarlotta, M. Ali Khan, and F. Reito (Submitted)
In mainstream neoclassical economics, utility maximization is the only engine of individual action, and the other or the social, if it is modeled for decisions deemed fundamental, it is done as a tacit externality parameter affecting an agent’s maximized payoff. And even when hitched to a social reference point, a fully decisive and immediate response is invariably assumed. In this paper, we propose a non-standard articulation of the trade-off between personal utility and social distance, one motivated by experimental evidence from psychology, management science, and economics. Our approach deconstructs non-recurrent consumer choice to two stages: a non- decisive first stage in which a binary relation, called one-many ordering, yields an interval, the consideration set, to which the deferred choice is confined; a decisive second stage in which the distance from the average social choice, and future social expectations, are taken into account in present utility. Finally, we embed this indecisive consumer in an exploratory game-theoretic setting, and show that indecisiveness and choice deferral may cause social loss.
AMASES award for the best conference paper, University of Milano Bicocca, 2023
Decisions in Economics and Finance, Economics and Philosophy, Journal of Mathematical Economics